Boston, MA -- (ReleaseWire) -- 02/08/2013 -- BMI View: Positive Outlook, Forecasts Fine-Tuned
We have modified our outlook for the Indonesian economy in 2012 and 2013. We have raised our growth estimate for 2012 on the strength of better-than-expected data, but reduced the forecast for 2013 because we see hints of overheating, so expect a more restrictive monetary policy. We now see growth of 6.0% in 2012, easing back to 5.6% in 2013. It has to be noted, however, that in relative terms Indonesia remains a regional out-performer, so even taking into account these adjustments, the macro-economy is supportive of the ports and shipping industry.
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We continue to think that the key to sustainable growth is investment in port infrastructure, including road and rail links in the hinterland areas. We are encouraged that after many delays, Indonesia Port Corporation II (IPC) announced in 2012 that it will invest US$2.47bn to develop an extension Tanjung Priok port in North Jakarta. This was followed in Q412 by news of wider investments in the country's ports.
Headline Industry Data
- 2013 Tanjung Priok total tonnage forecast to grow 5.2% to 51.660mn tonnes, with average growth of 5.5% expected over our forecast period to 2017.
- 2013 Palembang total tonnage forecast to grow 3.3% to 11.445mn tonnes, with average growth of 4.0% over our forecast period.
- 2013 Tanjung Priok container throughput forecast to grow a strong 9.0% to 6.465mn twenty-foot equivalent units (TEUs), with average growth of 10.0% over our forecast period.
- 2013 Palembang container throughput forecast to grow 5.1% to 95,316TEUs, with average growth of 6.1% over our forecast period.
Key Industry Trends
Indonesia Could Become 'Automobile Hub' But Needs Port Investment
The country could become a key South Asian automobile production and trade hub, but requires investment in port infrastructure if it is to seize this opportunity. That was the implication of new BMI analysis. We believe the rapid and timely expansion of the Tanjung Priok car terminal will be critical. The port is a key route for Japanese car exports to other emerging markets in Asia, Africa and the Middle East. It is projected to handle 320,000 units in 2012 and 535,000 units in 2013, more than its current intended capacity of 265,000 units. The current delays in export shipments (due to the stretched capacity) might turn off other automakers from setting up production facilities in the country as they do not want to be sitting on unshipped inventory, which is falling in value.
Theft And Piracy Warning From The IMB
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