Signs of recession in the Western countries have been mounting as economic data for the US, UK, and Eurozone has come in below expectations, suggesting that the economy is starting to contract; while inflation rates have remained high. Asian countries also contributed to the gloomy sentiment, with China’s 4Q 2022 GDP at the level of 2.9%, failing to reach the 5% target. The BOJ had faced the challenge of tightening its monetary policy, in the same voice as US & European central bank officials who are convinced that a high-interest rate policy is still needed in 2023 (as stated at the World Economic Forum in Davos-Switzerland). US 2022 earnings are released, providing insight into the survey that S&P corporate earnings will fall 2.4% in 1Q23. On the other hand, there is still good news from the domestic side; Trade Balance has recorded a surplus at USD3.89 billion (32nd consecutive month of surplus), lower than both consensus & previous period, USD5.16 billion. BI Governors Meeting (RDG) decided to raise the BI7DRR benchmark rate by 25bps to 5.75%, in line with the market expectation. BI also cut the global economic growth in 2023 to 2.3% from 2.6%; even so, it remains optimistic that the Indonesian economy will grow at the level of 4.5%-5.3%.
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