INDONESIATOURISMOUTLOOK2018:OPPORTUNITIESANDCHALLENGES

Faisal Basri 1November2017

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Part I Conducive Global Environment

IMFraisesglobalgrowthforecasts,gainingmomentum—fornow

* Projection. Sources: IMF, World Economic Outlook April 2014 and October 2017.

2013 2014 2015 2016 2017* 2018*WorldGDPgrowth 3.4 3.4 3.4 3.2 3.6 3.7Advancedeconomies 1.4 1.8 2.1 1.7 2.2 2.0-UnitedStates 2.2 2.4 2.6 1.5 2.2 2.3-Euroarea -0.4 0.9 2.0 1.8 2.1 1.9-Japan 1.6 0.0 1.2 1.0 1.5 0.7Developingeconomies 5.0 4.6 4.2 4.3 4.6 4.9-China 7.7 7.3 6.9 6.7 6.8 6.5-India 6.9 7.3 7.9 7.1 6.7 7.4-Asean-5 5.1 4.6 4.8 4.9 5.2 5.2Indonesia 5.6 5.0 4.8 5.0 5.2 5.3Worldtradevolumegrowth 3.3 3.4 2.7 2.4 4.2 4.0

IMF:“…“theglobaleconomiclandscapestartedtoshiftinthesecondhalfof2016.Developmentssincelastsummerindicatesomewhatgreatergrowthmomentum

comingintothenewyearinanumberofimportanteconomies.”

Turningpoint?

Source:IMF,WorldEconomicOutlook,October2017.

Thepickupinglobalactivitythatstartedin2016gatheredsteaminthefirsthalfof2017,reflectingfirmerdomesticdemandgrowthinadvancedeconomiesandChinaandimprovedperformanceinotherlargeemergingmarketeconomies.

2

WORLD ECONOMIC OUTLOOK: SEEKING SUSTAINABLE GROWTH—SHORT-TERM RECOVERY, LONG-TERM CHALLENGES

International Monetary Fund | October 2017

reforms would help low-income countries—many of which need to undertake durable fiscal adjustment efforts and reduce financial vulnerabilities—make the best use of the coming demographic dividend by spurring job creation.

Recent Developments and ProspectsWorld Economy Keeping Its Momentum

The pickup in global activity that started in 2016 gathered steam in the first half of 2017, reflecting firmer domestic demand growth in advanced econo-mies and China and improved performance in other large emerging market economies. The continued recovery in global investment spurred stronger man-ufacturing activity (Figures 1.1 and 1.2). World trade growth moderated in the second quarter after expand-ing very briskly in the first. Global purchasing manager indices and other high-frequency indicators for July and August suggest that global growth momentum continued into the third quarter of 2017.

Among advanced economies, domestic demand and output grew faster in the first half of 2017 than in the second half of 2016. In the United States, weakness in consumption in the first quarter turned out to be temporary, while business investment continued to strengthen, partly reflecting a recovery in the energy sector. In the euro area and Japan, stronger private consumption, investment, and external demand bolstered overall growth momentum in the first half of the year. Growth in most of the other advanced economies, with the notable exception of the United Kingdom, picked up in the first half of 2017 from its pace in the second half of 2016, with both domestic and external demand contributing.

Among emerging market and developing economies, higher domestic demand in China and continued recovery in key emerging market economies supported growth in the first half of 2017. In India, growth momentum slowed, reflecting the lingering impact of the authorities’ currency exchange initiative as well as uncertainty related to the midyear introduction of the country-wide Goods and Services Tax. Higher external demand boosted growth in other emerging market economies in East Asia. In Brazil, strong export perfor-mance and a diminished pace of contraction in domes-tic demand allowed the economy to return to positive growth in the first quarter of 2017, after eight quarters of decline. Mexico maintained growth momentum, despite uncertainty related to the renegotiation of the North American Free Trade Agreement and significant

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4. Advanced Economies

GDP Growth(Annualized semiannual percent change)

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Figure 1.1. Global Activity Indicators

1. World Trade, Industrial Production, and Manufacturing PMI (Three-month moving average; annualized percent change , unless noted otherwise)

Sources: CPB Netherlands Bureau for Economic Policy Analysis; Haver Analytics; Markit Economics; and IMF staff estimates.Note: CC = consumer confidence; PMI = purchasing managers’ index; WEO = World Economic Outlook.1Australia, Canada (PMI only), Czech Republic, Denmark, euro area, Hong Kong SAR (CC only), Israel, Japan, Korea, New Zealand (PMI only), Norway (CC only), Singapore (PMI only), Sweden (CC only), Switzerland, Taiwan Province of China, United Kingdom, United States.2Argentina (CC only), Brazil, China, Colombia (CC only), Hungary, India (PMI only), Indonesia, Latvia (CC only), Malaysia (PMI only), Mexico (PMI only), Philippines (CC only), Poland, Russia, South Africa, Thailand (CC only), Turkey, Ukraine (CC only).

April 2017 WEO October 2017 WEO

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5. Emerging Market and Developing Economies

2. Manufacturing PMI (Three-month moving average; deviations from 50)

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2012 13 14 15 16 Aug. 17

Advanced economies1

Emerging market economies2

Manufacturing PMI (deviations from 50; right scale)Industrial production

3. Consumer Confidence (Index, 2010 = 100)

Advanced economies1

Emerging market economies2

World

World trade volumes

Global activity strengthened in the first half of 2017, reflecting firmer domestic demand growth in advanced economies and China and improved performance in other large emerging market economies. Global manufacturing purchasing managers’ indices indicate strong momentum continued into the third quarter.

Containerthroughputindexreachesnewheights

Source:RWIEconomicResearchInstitute

81.4

128.8

70.0

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90.0

100.0

110.0

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140.0

Seasonallyandworkingdayadjusted2010=100

Balticdryindexrecovedin2017

Source:tradingeconomics.com

TheBalticDryIndexisacompositeofthreesubindicesthatmeasuredifferentsizesofdrybulkcarriers,ormerchantships:Capesize,PanamaxandSupramax.

BalticExchangeDryIndexreachedanalltimehighof2,330inDecemberof2013andarecordlowof290inFebruaryof2016.

Part II Need New Engine of Growth

TheriseanddeclineofIndonesianeconomy:GDPgrowth1961-2017(%)

6.1

-2.3

1.1

12.0

9.8

6.2 6.0

9.2

1.1

8.5

3.5

9.18.4

-13.1

5.7 6.3

4.6

6.45.0

4.9

5.05.0

1961

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2017*

The fall of Old Order

Pertamina crisis

Oil price collapse

Economic crisis and the end of New Order/Soeharto era

Global financial

crisis

Trendline-polynomial

*Firstsemester.Source:BPS-StatisticsIndonesia.

Thedecliningtrendofeconomicgrowthinthelong-term,1976-2017*

*Firstsemester.Source:BPS-StatisticsIndonesia.

-15 -14 -13 -12 -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9

10 11 12

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*

GDPgrowth,year-on-year,percent

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8% 7%6%

5%

Towardalowerlevelofequilibrium,from6%to5%

*Firstsemester.Source:BPS-StatisticsIndonesia.

3

4

5

6

7

2010 2011 2012

2013 2014

2015 2016

2017*

6.22 6.17

6.03

5.56

5.01

4.88

5.02 5.01

GDPgrowth,year-on-yer,percent

6%

5%

Settingofffromapointwhereneighboringcountriesstartedtheirjourneytoo(1)

Source: World Bank, World Development Indicators online, downloaded on August 31, 2017.

8,260 8,840

3,400

27,600

9,850

5,640

0

5,000

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30,000

1969

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Grossnationalincome(GNI)percapita,Atlasmethod,currentUS$)

China Brazil Indonesia Korea,Rep. Malaysia Thailand

Economicgrowthbyisland:KalimantanandSumeterasufferedthemost

2015:3.5%2016:4.3%2017*:4.1%Share:21.7%

2015:1.3%2016:2.%2017*:4.4%Share:8.2% 2015:8.2%

2016:7.4%2017*:6.5%Share:6.1%

2015:5.5%2016:5.6%2017*:5.4%Share:58.7% 2015:10.3%

2016:5.9%2017*:3.1%Share:3.1%

2015:6.6%2016:7.5%2017*:4.5%Share:2.3%

*Firstsemester.Source:BPS-StatisticsIndonesia.

GDPgrowthbysector

*Firstsemester;excludingtaxesminussubsidies.Source:BPS-StatisticsIndonesia.

Sectors 2012201320142015

2016Q1-17Q2-17Share2017*

Agriculture,forestry&fishery 4.59 4.20 4.24 3.77 3.25 7.12 3.33 13.76MiningandQuarrying 3.02 2.53 0.43 -3.42 1.06 -0.64 2.24 7.65Manufacturingindustry 5.62 4.37 4.64 4.33 4.29 4.24 3.54 20.37Electricityandgas 10.06 5.23 5.90 0.90 5.39 1.60 -2.53 1.19Water,wastemanagement,cesspitandrecycling 3.34 3.32 5.24 7.07 3.60 4.39 3.67 0.07Construction 6.56 6.11 6.97 6.36 5.22 5.95 6.96 10.17Wholesale&retailtrade,cars&motorcyclesreparations 5.40 4.81 5.18 2.59 3.93 4.96 3.78 13.13Transportationandwarehousing 7.11 6.97 7.36 6.68 7.74 8.03 8.37 5.24Accommodation,foodandbeverages 6.64 6.80 5.77 4.31 4.94 4.68 5.07 2.87Informationandcommunication 12.28 10.39 10.12 9.69 8.87 9.13 10.88 3.81Financeandinsurance 9.54 8.76 4.68 8.59 8.90 5.99 5.94 4.25Realestate 7.41 6.54 5.00 4.11 4.30 3.67 3.86 2.82Businessservices 7.44 7.91 9.81 7.69 7.36 6.80 8.14 1.75Publicadm.,defense,andcompulsorysocialsecurity 2.13 2.56 2.38 4.63 3.19 0.22 -0.03 3.59Education 8.22 7.44 5.47 7.33 3.84 4.09 0.90 3.18Healthandsocialactivities 7.97 7.96 7.96 6.68 5.00 7.10 6.40 1.07Otherservices 5.76 6.40 8.93 8.08 7.80 8.01 8.63 1.76Grossdomesticproduct 6.03 5.56 5.01 4.88 5.02 5.01 5.01 100.00

Pertumbuhannilaitambahsektortransportasidanhospitalitypunmeningkatrelatiftinggi

Q1-2017 Q2-2017Transportationandwarehousing 8.03 8.37Railwaystranspot 12.30 18.03Landtransport 7.70 8.04Seatransport 0.85 3.07River,lake,andferrytransport 7.51 6.57Airtransport 13.23 11.92Warehousingandsupportservicesfortransportation,postal&courier 7.29 7.96

Accomodation,foodandbeverages 4.68 5.07Accomodation 4.70 4.84Foodandbeverages 4.68 5.13

yearonyear,percent

Source:BPS-StatisticsIndonesia.

Transportasipenumpangpunnaikcukuptinggi

Source:BPS-StatisticsIndonesia.

Penumpangangkutanudaradomestik 10.22

Penumpangangkutanudarainternasional 13.54

Penumpangangkutanlautdomestik 3.62

Barangangkutandomestik 1.69

Penumpangangkutankeretaapi 8.53

Barangangkutankeretaapi 18.32

PertumbuhanangkutanpenumpangdanbarangSemesterI2017,persen

Growthoftourismcomponents

Source:BPS-StatisticsIndonesia.

Percent

AirtransportAccommodationRailwaytransport Restaurant Hospitality

2011 14.65 11.24 -3.23 5.91 6.86

2012 7.09 9.51 -4.19 5.99 6.64

2013 4.75 9.48 6.14 6.16 6.80

2014 6.07 7.81 20.81 5.27 5.77

2015 9.44 5.67 4.45 3.97 4.31

2016 13.28 5.32 3.46 4.84 4.94

2017-Q1 13.23 4.70 12.3 4.68 4.68

2017-Q2 11.92 4.84 18.03 5.13 5.07

ShareoftourismcomponentstoGDP

Source:BPS-StatisticsIndonesia.

Percent

AirtransportAccommodationRailwaytransport Restaurant Hospitality

2010 0.56 0.52 0.03 2.40 2.92

2011 0.60 0.52 0.03 2.34 2.86

2012 0.72 0.59 0.03 2.34 2.93

2013 0.81 0.67 0.03 2.37 3.03

2014 1.03 0.70 0.04 2.34 3.04

2015 1.24 0.70 0.06 2.26 2.96

2016 1.42 0.69 0.06 2.23 2.92

2017-Q1 1.46 0.69 0.06 2.22 2.90

2017-Q2 1.53 0.67 0.06 2.16 2.83

Newprimadona:tourism?

*January-SeptemberSource:BPS-StatisticsIndonesia

InternationalvisitorsarrivalstoIndonesiabyportofentryGrowthJanuary-September2017(yoy)=25.05%

PortofEntry 2014 2015 2016 2017*NgurahRai 3,731,735 3,936,066 4,885,062 4,529,352Soekarno-Hatta 2,246,437 2,368,628 2,603,195 1,937,764Batam 1,454,110 1,585,719 1,510,203 1,080,437TanjungUban 320,861 305,471 308,964 261,359Juanda 217,193 204,200 231,455 173,647Kualanamu 234,724 201,447 211,942 169,332HuseinSastranegara 180,392 159,811 183,542 118,747AdiSucipto 89,156 82,126 114,639 105,487Lombok 69,881 70,248 91,102 94,677TanjungPinang 97,672 91,341 93,924 81,929TanjungBalaiKarimun 100,782 97.32.00 91,811 61,238Top-11 8,742,943 9,102,377 10,325,839 8,613,969Others 692,468 1,128,398 1,193,436 1,844,330Total 9,435,411 10,230,775 11,519,275 10,458,299

MostlyfromAsia-Pacific

*January-JuneSource:BPS-StatisticsIndonesia

InternationalvisitorsarrivalstoIndonesiabynationality

Nationality 2014 2015 2016China 1,052,705 1,249,091 1,556,771Malaysia 1,418,256 1,431,728 1,541,197Singapore 1,559,044 1,594,102 1,515,701Australia 1,145,576 1,090,025 1,302,292Japan 505,175 528,606 545,392India 267,082 306,960 422,045Korea 352,004 375,586 386,789UnitedStates 246,397 269,062 316,782Philippines 248,182 267,700 298,910France 208,357 208,679 256,229Taiwan 220,328 223,478 252,849Top-11 7,223,106 7,545,017 8,394,957Others 2,122,305 2,685,758 3,124,318Total 9,345,411 10,230,775 11,519,275

Travel:inboundandoutbound

*FirstsemesterSource:BankIndonesia.

§  AngkaversiBankIndonesiayangtercantumdalamneracapembayaran(balanceofpayments)lebihrendahketimbangversiBPS(perbedaanmetodepencatatan?)

§  Pertumbuhaninboundlebihcepatketimbangoutbound.Pada2018-2019bolehjadipertumbuhanoutboundlebihtinggi

§  Diversifikasitujuanwisatadanpeningkatandayatariknyasangatpentinguntukmeredampeningkatanoutbound

§  Kemacetanyangkianparahdikota-kotabesarmendorongwisatawandomestikmengunjungiwisata“senyap”

Inbound Outbound Net2010 7,118 6,454 6642011 7,743 6,971 7722012 8,107 7,636 4712013 8,861 8,253 6082014 9,488 8,242 1,2462015 9,794 8,345 1,4492016 10,860 8,509 2,3512017* 5,898 4,499 1,399

Thousandstravelers

Travel:exportsandimports

Exports Imports Net2010 6,958 -6,395 5632011 7,997 -6,255 1,7412012 8,324 -6,771 1,5532013 9,119 -7,675 1,4442014 10,261 -7,682 2,5792015 10,761 -7,292 3,4692016 11,238 -7,549 3,6882017* 5,961 -3,727 2,233

MillionsofUSD§  Targetwismansebagaipenyumbangdevisaterbesarpada2019senilaiRp280triliun(USD20,7miliar,dengankursRp13.500perUSD)teramatambisius.Berbedadengantargetpembangunaninfrastrukturyanglebihbanyakdalamkendalipemerintah,targetwismanlebihbanyakdipengaruhifaktoreksternaldiluarkendalipemerintah

§  TargetyanglebihterjangkausekitarRp200triliun(US$14,8miliar)§  JumlahdanbelanjaturisIndonesiakeluarnegeridiperkirakanjuga

meningkat,sehinggapenerimaannettodiperkirakansekitarUS$6miliarpada2019.

*FirstsemesterSource:BankIndonesia.

InboundpercapitaUS$)

*FirstsemesterSource:BankIndonesia.

978

1,0331,027 1,029

1,081

1,099

1,035

1,011

2010 2011 2012 2013 2014 2015 2016 2017*

CompositionofGDPbyexpenditure,2016(%)

Source:BPS-StatisticsIndonesia.

58

32

9 1

Privateconsump0on

Grossfixedcapitalforma0on

Governmentconsump0on

Exportsminusimports

Top-20Mid-40Bottom-40

Distributionofspendingby“income”group

Source:BPS-StatisticsIndonesia.

17

36

46

Bottom-40

Mid-40

Top-20

March2017,percent

Changesinlifestyle

•  Shiftinconsumptionpatternfromfoodandapparelto“leisure”.

•  Leisure:hospitality(restaurantsandhotels)andrecreation&culture.

Terima Kasih

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