ECONOMIC_UPDATE 5-Aug-11

Weekly Economic Update
- 5 August 2011 -

SUMMARY

Global Economy

The United States raised its debt limit by between US$ 2.1 trillion and US$ 2.4 trillion. Moody’s Investors Service confirmed the country’s sovereign rating at Aaa with negative outlook.

Swiss central bank unexpectedly lowered its key rate to near zero to weaken the exchange rate. For the same purpose, Japanese government sold the yen in the market.

Spain’s Aa2 government bond rating was placed by Moody’s on review for possible downgrade. The rating action considered continued pressures on government funding, higher risks to bondholders, and challenges to fiscal consolidation.

Indonesia Economy

Consumer prices gained 0.67% in July 2011 from prior month, allowing year-on-year inflation to recede further to 4.61%, the lowest in 14 months. Inflation in the month was mostly supported by the build-up of food prices.

Exports and imports reached new historical high in June 2011 after rising 0.71% and 1.73% from May. Trade surplus shrank, however.

Consumer confidence index increased to 111.8 last month, the highest since at least 19 months, the central bank’s latest poll showed. Separate survey revealed 3.3% month-on-month gain of retail sales in June.