Download Associate Prof. Dr. Rifki Ismal

The Central Bank of Republic of Indonesia
Potensi Pengembangan
Ekonomi Syariah di Indonesia
Associate Prof. Dr Rifki Ismal
Universal Indonesia Economic Festival
9 Maret 2013
Sekolah Tinggi Akuntansi Negara
Indonesian Economy : Monetary Policy
and Financial Stability – Recent
Development
Executive Summary
3
 Indonesia’s economic growth remains robust in 2012 amidst the
continuation of global economic slowdown. Contributed by buoyant
consumption and investment, economic growth in the Q4-2012
reached 6.11%, and charted 6.23% for the whole year of 2012.
 Inflation in January 2013 remained subdued and arrive at 4.57%(yoy)
which is within target range of 4.5%±1%.
 Financial system stability remained solid with intermediation function
is improving within prudential manner: capital adequacy ratio (CAR) is
well above 8% and gross non-performing loan (NPL) below 5%. In
December 2012, credit growth charted 23.1% (yoy) with investment
loan recorded the highest growth of 27.4% (yoy),
 In the Board of Governors' Meeting convened on 7 March 2013, Bank
Indonesia decided to hold the BI rate steady at 5.75% in which
considered consistent with low inflation forecast and contained within
its target range of 4.5%±1% in 2013 and 2014.
Most sectors in 2013 will grow higher than the previous
year
4
GDP by Sectors
2010
GDP
Agriculture
Mining and Quarrying
Processing Industry
Electric, Gas and Clean Water
Constructions
Trade, Hotel and Restaurant
Transport and Communication
Finance
Services
6.2%
3.0%
3.9%
4.7%
5.3%
7.0%
8.7%
13.4%
5.7%
6.0%
Economic Structure 2013
Finance
7.0%
Transportati
on
6.5%
Services
10.3% Agriculture
15.6%
Mining
12.3-12.4%
Trade
13.0%
Industry
24.2.3%
Constructio
n
10.3%
Electricity
0.8%
2011
6.5%
3.4%
1.4%
6.1%
4.8%
6.7%
9.2%
10.7%
6.8%
6.7%
2012
6.2%
4.0%
1.5%
5.7%
6.4%
7.5%
8.1%
10.0%
7.2%
5.2%
Budget
2013
6.8%
3.7%
2.8%
6.5%
6.6%
7.5%
8.9%
12.1%
6.1%
6.0%
Outlook
2013
6.6%
6.8%
4.1%
4.1%
0.3%
0.3%
6.3%
6.5%
6.7%
6.7%
8.8%
9.3%
8.1%
8.3%
11.7%
11.9%
6.7%
7.1%
5.7%
5.7%
Contribution to Growth
2012
2013
0.51%
0.11%
1.47%
0.05%
0.49%
1.44%
0.98%
0.69%
0.49%
0.51%
0.02%
1.62% - 1.67%
0.05%
0.58% - 0.62%
1.45% - 1.5%
1.19% - 1.21%
0.65% - 0.68%
0.53%
Projection for 2013:
 The industrial sector remains the largest
contributor to growth.
 The agricultural sector will grow by about 4%,
supported by productivity improvement
programs, land, and diversification of
products.
 Transport and communications, construction,
and trade are the sector with the highest
Source:
Ministry of Finance Presentation on Feb 28, 2013
growth.
4
Indonesian Economy
5
Exchange Rate
On January 2013, Rupiah depreciated by
0.22% (mtm) to Rp9.654 per USD, with a
contained volatility.
In the future, BI will continue to maintain
the stability of Rupiah exchange rate consistent
with its economic fundamentals.
Direct Investment
• Investment activity Indonesia continues on
an upward trend. Total direct investment in
2010-2012 are around US$22.9 billion,
US$27.9 billion, and US$34.8 billion
respectively.
• In 2012, direct investment exceeded
government target and increased by 24.6%
(yoy)
Direct Investment Growth (%, yoy)
80
71.6
54.2
60
40
20.5
20.4
24.6
20
0
2006
-20
2008
2009
-14.0
Source: Ministry of Finance Presentation on Feb 28, 2013
-40
2007
-32.8
2010
2011
2012
6
Inflation pressure remain contained, with core inflation continuing to trend down …
Headline Inflation
10,0
9,0
8,0
7,0
6,0
5,0
4,0
3,0
2,0
1,0
0,0
yoy (%)
December 2012 inflation: January 2013 inflation:
Ytd = 1.03%
Yoy = 4.3%
Yoy = 4.57%
Mtm= 0.54%
Mtm= 1.03%
Headline Inflation
Ytd = 4.3%
9,17
7,02
6,44
4,50
5,67
3,72
4,57
4,61
3,56
2,41
J-09 M-09 M-09 J-09 S-09 N-09 J-10 M-10 M-10 J-10 S-10 N-10 J-11 M-11 M-11 J-11 S-11 N-11 J-12 M-12 M-12 J-12 S-12 N-12 J-13
Source: BPS, (2012)
8,0
7,5
7,0
6,5
6,0
5,5
5,0
4,5
4,0
3,5
3,0
Inflation by Component
yoy (%)
yoy (%)
18,25
20,00
7,39
15,00
7,48
10,00
10,59
5,00
2,49
-6,01
2,42
0,00
4,32
-5,00
3,56
-10,00
J-09 M-09 M-09 J-09 S-09 N-09 J-10 M-10 M-10 J-10 S-10 N-10 J-11 M-11 M-11 J-11 S-11 N-11 J-12 M-12 M-12 J-12 S-12 N-12 J-13
Core (LHS)
Source : BPS, 2012)
Inflation
by Measures (percent, yoy)
Source : National Bureau of Statistics
Administered Price(RHS)
Volatile Food(RHS)
Source: Ministry of Finance Presentation on Feb 28, 2013
6
Labor productivity keeps increasing …
Unemployment Rate
7
Poverty Level
11%
18%
15%
9%
Sept-12:
11.66%
12%
Aug-12: 6.14%
7%
5.8%-6.1%
5%
9%
9.5-10.5%
6%
2007
2008
2009
2010
2011
2012
2013
target
2007
Labor Productivity
2008
2009
2010
2011
2012
2013
target
Minimum Wage
1200
80
25%
Minimum Wage
70
Labour Productivity, Current Price
60
Labour Productivity, Riil Price
Minimum Wage Growth
1000
20%
800
15%
50
40
600
10%
30
20
400
5%
200
10
0
0
0%
2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Ministry of Finance Presentation on Feb 28, 2013
7
8
Indonesian Banking: Recent
Development
Indonesian Banking
Sound Financial Sector
 Banking industry has been more resilient, as indicated by secure level of CAR above 8%
(17.3% at the end of Dec’2012) and gross NPLs managed at below 5% (1.9% in Dec’2012).
 Further improvement in banking intermediation is reflected in improving credit growth,
recorded in December 2012 at 23.1% (yoy), in which investment credit, working capital
credit, and consumption credit grew by 27.4% (yoy), 23.2% (yoy), and 19.9% (yoy).
9
Executive Summary
10
Roles of Banking in the Domestic Economy
 The role of the Indonesian banking is not yet optimal to support the real sector. Credit
to GDP ratio is relatively low compared to the ASEAN countries.
 The Indonesian Credit to GDP ratio stands between 26%-32%, almost the same as
Philippines and Brunei. While others, especially Thailand and Singapore has more than
100% credit to GDP ratio. Malaysia is following them with a growing ratio from 96% to
112%.
 As such, the are more rooms to utilize the banking sector to boost the domestic
economy.
%
160
140
2008
Indonesia
Singapore
Malaysia
Phillipines
Brunei
Thailand
2008
26.60
106.70
96.70
29.10
35.20
113.00
2009
27.70
109.90
111.60
29.20
44.50
116.40
2010
29.10
100.00
110.70
29.60
40.90
123.90
2011
31.70
112.60
112.20
31.80
31.80
140.10
2009
120
2010
2011
100
80
60
40
20
0
Indonesia
Singapore
Malaysia
Phillipines
Brunei
Thailand
Indonesian Islamic Banks – Sustainable
Growth and Role in Economic
Development & Financial Stability
Indonesia’s Islamic Bank (iB) Development
12
Rp. Triliun
250,000,000
60%
ASSET (left axis)
GASSET
Gfinancing
Gdeposit
50%
200,000,000
40%
150,000,000
30%
100,000,000
20%
50,000,000
10%
0%
Jan-07
Mar-07
May-07
Jul-07
Sep-07
Nov-07
Jan-08
Mar-08
Mei-08
Juli-08
Sept - 08
Nov-08
Jan-09
Mar-09
Mei-09
Jul-09
Sept-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Feb-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
0
Indonesia’s IB
(BUS+UUS) average
growth in last 5 years
reach 37% for asset
then 36% for financing
and 38% for deposits.
Whereas in 2012, the
growth for asset
(±34%) value Rp. 195
T, financing (±44%)
value Rp.147,5 T and
deposit (±28%) value
Rp.147,5 T.
Indonesia’s iB aset ±98% dominated by Islamic Commercial Bank (BUS) and Islamic Busines
Unit (UUS). In year 2012, the IB’s (BUS+UUS) performance relatively good, reflected by : (i)
optimum intermediation function with average FDR reach 97,16%; (ii) CAR beyond
minimum regulation 8% with average CAR reach ±17%; and (iii) Non Performing Financing
(NPF) under 5% with average 2.72% and even in December 2012 reach 2.22%.
Current Growth is in line with projections
13
230,000,000
180,000,000
European Crisis
210,000,000
Islamic banks’ (BUS+UUS+BPRS) asset growing in 2012 reach Rp. 199,72 T
and within BI’s previous projection scenarios between moderate scenario
(Rp.187.2T) and optimistic scenario (Rp.206T).
Nov-12
Sep-12
Jul-12
May-12
Mar-12
Jan-12
Nov-11
Sep-11
Jul-11
May-11
Projections
90,000,000
Mar-11
Actual
Jul-12
110,000,000
May-12
60,000,000
Mar-12
130,000,000
Jan-12
80,000,000
Nov-11
150,000,000
Sep-11
100,000,000
Jul-11
170,000,000
May-11
120,000,000
Mar-11
190,000,000
Jan-11
140,000,000
Jan-11
160,000,000
Increasing number of Islamic Bank (iB) s Customer
 With 11 Islamic Commercial Bank (BUS), 24 Islamic Business Unit
(UUS) and 156 Islamic Rural Bank (BPRS), the office network
increased from 2.101 in year 2011 becoming into 2.663 (26,75%).
 The increasing number of iB’s customer  iB’s account number
(financing + deposits) increases ± 4 million accounts from ± 10.4
mio year 2011 into ± 14.4 mio in Dec’12 (38%, yoy)
 The significant increasing number of iB’s customer in last 4
years (average ± 31%), even growth in period 2011 – 2012 (±
38%) higher than previous period  reflect the more trusted iB
by Indonesia’s people for saving/invest fund
 More broaden customer has been serviced by Islamic banks
14
The Decreasing Growth of Non Productive Financing Share/Sector
15
The direction of more financing toward productive sector looks on the
right track by the end of 2012
Decreasing growth of non productive financing share
 Financing growth to Non
productive sector (services and
others) has decelerated from 8,4%
(2010 - 2011) become 0,82% (2011
– 2012) or decreasing 7,59%.
 The growth share of Non
Productive financing type compare
to productive (working capital +
Investment) has decelerated from
30,09% (2010 - 2011) become
1,92% (2011 - 2012) or decreasing
28%.
Data :Sept’12
Islamic Banks (iB) : Promote Financial Stability
16
Advantages as Islamic banks during current global uncertain periods:
1.
2.
3.
4.
Profit and loss sharing system will be beneficial and provide fair return to all parties. With this
system, islamic banks will promote social welfare as the benefit receivers need to pay zakah as
part of social contribution while complying to the shariah principle.
The products offered by islamic banks always use real sector transaction as its underlying;
therefore, the impact of islamic financial transaction can be significant to promote economic
growth
Reduce potential excessive speculation since islamic finance prohibits the speculative motive.
Derivatives products are prohibited by islamic principles because of the existance of gharar
In the case of Indonesia:
a.
b.
islamic banks nature is to focus on developing small and medium enterprises as the underlying, and there
are relatively small risks involved
Exposure to currency risk, financial sector is relatively small
Indonesian Islamic Banks – Policy
Direction and Prospect
BI Policy: Product Innovation
1.
2.
3.
4.
18
In the current highly competitive environment, islamic banks cannot rely on standard
product to attract customers. Islamic financial institutions must act and able to offer
pure and genuine Islamic products that bring up the uniqueness of sharia principles
that can meet customers' and investors needs
BI will facilitate Working Group Discussions (with National Sharia Board and indonesia
Accountant Association) to activate innovation and creativity regarding product
development to attract more customers.
BI will consider to improve related regulations on Islamic banking products in order to
increase the efficiency of the product licensing process.
In order to increase public awareness to Islamic banking products (iB financial literacy),
socialization programs / public education and communication will be more focused on
equality "parity" and the uniqueness of "distinctiveness" of the product
Islamic banking.
Islamic banks are expected to strengthen the product development unit in order to
accelerate the equalization of products and service levels with conventional banks,
to increase service to meet customers needs
BI Policy: Emphasis Financing in Productive Sector
1.
2.
19
Bank Indonesia in its capacity will facilitate link and match program between
islamic banks and industry which is prioritized by the government, such as
infrastructure, agriculture, as well as others.
Focus Group Discussions and business match will be the main forum to match
supply and demand between banks and productive sectors.
 BI have facilitated several FGDs and have received positive feedbacks.
In return, this will help promoting resilience of islamic banks, as well as generate
higher asset growth, so that asset share of islamic banks compared to that of in
conventional will gradually increase  projection of 15-20% in the next
decade
Projection of Indonesia’s iB (BUS+UUS+BPRS): 2013
Baseline
(Rp.
Moderate
(%)
Triliun)
Asset
Deposit
(DPK)
Financing
(PYD)
(Rp.
Optimistic
(%)
(Rp. Triliun)
(%)
Triliun)
255
36 %
269
44%
296
58%
168
17%
177
23%
186
29%
200
36%
211
43%
222
50%
Growth (%)
Growth (Rp. Triliun)
60,00%
300
50,00%
250
40,00%
Base
Pesimis
line
30,00%
Moderat
20,00%
Optimis
200
Base
Pesimis
line
150
Moderat
100
Optimis
50
10,00%
0
0,00%
Aset
DPK
20
PYD
Aset
DPK
PYD
.
21
Wass. Wr. Wb.
The End
Thank You
SHORT BIO
22
Associate Prof. Dr. Rifki Ismal is both a
central banker and lecturer. He earned
bachelor degree in economics from University
of Indonesia, master in economics from
University of Michigan, ann arbor (USA) and
PhD in Islamic economics and Finance from Durham
University (England) in 2010. An Associate Professor in Islamic
Banking and Finance is from the Australian Government
(Australian Center for Islamic Financial Studies). He has
published more than 30 papers in international journals
(especially emerald journal series – london) and will publish a
book titling: Islamic bank in Indonesia (John Wiley and Sons) in
March 2013.