Indonesia Shipping Report Q1 2016
BMI View: Both of Indonesia's main ports are set to experience positive growth in 2016. Consumer demandand economic growth are set to bolster the country's shipping services, although the ongoing slowdown inChina's economy could hold Indonesia back from maximising its potential over the next couple of years.
Indonesia's economy is faring extremely well at present, with real GDP growth forecast to reach 5.6% in2016, up from 4.8% (estimate) in 2015. Added to the country's overall growth is the high rate of per capitagrowth, which we estimate rose by 10.8% in 2015 and, despite contracting slightly to 9.4% in 2016, willremain steadily about 10% in our medium-term forecast to 2019. This high consumer demand led fromfavourable demographics, rising levels of urbanisation and greater household leverage all bode well for thecountry's shipping sector, giving considerable upside risk to our forecasts. Although Indonesia's main exportpartners remain (in order) Japan, China, Singapore, the US and India, bilateral negotiations that were set totake place with the European Union (EU) in September 2015, along with a bilateral agreement of increasedties reached with Singapore earlier in the year, show the country is actively seeking to diversify its tradepartners and export markets, especially away from a stumbling China. This could see pay-offs in themedium term to the country's shipping sector, especially if agreements outside of Asia - such as with the EU- were able to take hold.
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