The Coincident Economic Index (CEI) gives a stronger signal that the economy is firmly in an expansionary phase. Moreover, the expansion should be sustainable – as indicated by the upward trend of the Leading Economic Index (LEI). Nonetheless, some concerns have been raised that the pace of economic growth may fall short of its potential because of slow monetary policy transmission. However, if this problem can be rectified, we believe that the economy can grow at a much faster rate in the coming quarters.

• The Leading Economic Index (LEI) rose in August. This provides strong evidence that the increasing trend of the LEI is still intact, signifying that the current economic expansion is sustainable.
• The Sequential Signaling Method employed suggests that the Indonesian economy is firmly in the expansionary phase of its business cycle.

All in all, we conclude that the Indonesian economy is firmly in an expansionary phase. However, there are some emerging that warrant closer scrutiny. Click here to get the full report (with complete tables and charts).