The Week Ahead

Focus on IPI data

THE focus this week will be on December 2023’s industrial production index (IPI) and manufacturing data, both slated to be released on Wednesday.

IPI is expected to expand 0.9% year-onyear (y-o-y) from 0.6% in November 2023.

According to Trading Economics global macro models and analysts expectations, the IPI is expected to be 2.6% while retail sales y-o-y is expected to be 7.9% by the end of this quarter.

The Statistics Department is also expected to release the performance of wholesale and retail trade as well as the unemployment rate for December 2023 this week.

Meanwhile, Bank Negara is expected to announce its international reserves as at Jan 31 on Thursday.

Indonesia GDP

ING expects Indonesia’s fourth quarter gross domestic product (GDP) to settle at 5% y-o-y, driven by robust household spending fuelled by improved retail sales in the last months of 2023.

It expects inflation to remain subdued and at the lower end of the central bank’s target, which likely fostered a good run of spending.

ING expects GDP acceleration in the first quarter, boosted by election-related spending supporting overall economic activity.

Bloomberg estimates GDP to grow 4.97% y-o-y in the fourth quarter and 5.05% for the full year.

Central bank decisions

THE Reserve Bank of Australia (RBA), Bank of Thailand (BOT) and The Reserve Bank of India (RBI) are among the central banks to announce their monetary decisions this week.

UOB Global Economics and Market Research expects the RBA to keep the policy rate unchanged in the first quarter of this year (1Q24), and currently pencil in rate cuts in 3Q24.

According to a Bloomberg poll, all 16 analysts expect the RBA to stay on pause too.

UOB expects Bot’s policy rate to remain unchanged at 2.5% on the back of a favourable inflation outlook and the need to maintain the macro-financial stability continuously echoed by the central bank.

According to the Bloomberg poll, all five analysts expect the RBI reverse repo rate to be steady at 6.5%.