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Correction: --Indonesia's Annual Inflation Rate Rises to 3.08% in May from 2.42% in April

Indonesia's Annual Inflation Rate Rises to 3.08% in May from 2.42% in June

Indonesia's Manufacturing Activity Stabilizes in May, S&P Global Says

Indonesia's manufacturing sector recorded stability in May, S&P Global said Tuesday.The headline S&P Global Indonesia Manufacturing Purchasing Managers' Index was 50.0, compared with 49.1 in April.The reading signaled stable operating conditions after April's contraction, as stronger domestic demand supported a second consecutive increase in new orders.

Indonesia Cuts Crude Palm Oil Benchmark Price for June

Indonesia lowered the June crude palm oil (CPO) benchmark price to $1,029.51 per metric ton, according to a statement by Indonesia's Trade Ministry on May 30.This represents a 1.91% decline from $1,049.58 per metric ton in May.The lowering of the reference price came about due to a drop in demand from major importing countries such as India.As a result, export duty on crude palm oil fell to $148 per metric ton in the month, Director General of Foreign Trade of the Ministry of Trade Tommy Andana said.The June export levy stood at 12.5% of the reference price, which is nearly $128.6892 per metric ton, Tommy added.

Indonesia's Centralized Export System Takes Effect for Palm Oil, Coal, Ferroalloys

Indonesia's centralized system for the export of various natural resource commodities through state-entity Danantara Sumberdaya Indonesia (DSI) took effect June 1, according to a statement by the Economic Coordinator Ministry.The new policy, which will initially cover palm oil, coal, and ferroalloys, will be implemented in steps to ensure a smooth transition, according to the Coordinating Minister for Economic Affairs Airlangga Hartarto.Exporters will continue to use the current mechanism but they will be mandated to submit export activity documents to DSI electronically through the export service system of the Directorate General of Customs and Excise.Following three months of implementation, the transition period will be evaluated, with improvements being incorporated in the next stage. The full implementation is expected by Jan. 1, 2027.Airlangga hopes the new export governance policy "will ensure that every strategic export value provides real benefits to boost the economy and is also intended for the greatest prosperity of the Indonesian people."The centralization strategy is being implemented in a bid to boost export supervision and governance and avoid malpractices including invoicing and transfer pricing among other things.

Asia Week Ahead: Manufacturing Activity; Policy Rate Decision; and Inflation Prints

For the week ahead in Asia, manufacturing activity will be in focus as S&P Global releases a broad mix of purchasing managers' index reports covering multiple economies.The week opens with a flurry of manufacturing PMI readings for May, followed by inflation data from South Korea and Indonesia on Tuesday.Mid-week, Australia's first-quarter GDP report will take center stage, while markets will also watch a heavy batch of readouts from Vietnam.Thursday will be lighter, led by Australia's April trade report, before Friday brings India's policy rate decision and GDP figures and inflation readouts from multiple regions.Here's what to watch in the week ahead.MONDAY, June 1The week kicked off with a flurry of S&P Global's purchasing managers' index (PMI) reports covering May manufacturing activity across the region.China's manufacturing activity eased after the seasonally adjusted RatingDog China General Manufacturing PMI came in at 51.8, compared with 52.2 in the previous month and the consensus estimate of 51.4 from Investing.com.Data from the National Bureau of Statistic similarly showed factory activity easing, with the official purchasing managers' index falling to a neutral 50 from 50.3 in April.A reading above 50 means growth, while a reading below 50 indicates contraction.Manufacturing activity similarly slowed in Australia as new orders fell sharply for a third consecutive month amid rising costs and ongoing supply-chain disruptions linked to the war in the Middle East.In contrast, Japan's manufacturing production expanded, with the latest S&P Global Japan Manufacturing PMI coming in at 54.5, compared with 55.1 in April, matching the flash data.South Korean manufacturing output also expanded during the month, hitting its highest in five years due to a rise in production and new order volumes, S&P Global said.India, Taiwan and Vietnam were also among the regions that experienced improved output during May.Meanwhile, The Philippines' manufacturing activity returned to growth in May as stronger output and a recovery in new orders offset continued weakness in exports.Moving ahead, the Melbourne Institute said its monthly inflation gauge fell in May after two consecutive monthly increases, driven largely by a decline in transport costs. The monthly cost of living also declined in May, particularly for self-funded retirees.Elsewhere, South Korea recorded a trade surplus of $26.9 billion in May, a new all-time high, and marking the third straight month of more than $20 billion in trade surplus.TUESDAY, June 2Focus shifts Tuesday to inflation data coming in from South Korea.Economists at ING said consumer prices could reach 3% year on year in May, reflecting higher input costs that are likely to be passed on to consumers.Pipeline cost pressures are also likely to reflect in Indonesia's inflation print due Tuesday, with ANZ expecting prices to tick up to 3% from 2.42% in the prior month, the Wall Street Journal reported.Trade figures due in Indonesia the same day could also show moderating exports as the effects of front-loaded demand fade and commodity prices soften, the WSJ said, citing an RHB economist.On the activity front, S&P Global releases its monthly manufacturing PMIs for Indonesia, Malaysia, and Thailand. The Singapore Institute of Purchasing and Materials Management's PMI report is also expected.Lastly, Hong Kong will release its retail sales stats for April.WEDNESDAY, June 3Australia's first-quarter gross domestic product (GDP) data will dominate headlines Wednesday.Both Westpac and CommBank said they expect growth to have moderated during the first three months of the year, though their estimates differed.CommBank forecast a 0.2% quarterly rise in GDP, while Westpac projected 0.5%; both would be slower than the 0.8% growth recorded in the final quarter of 2025.Neighboring New Zealand will disclose first-quarter export and import price stats.Markets will also be following a speech by Bank of Japan Governor Kazuo Ueda for clues on the central bank's next interest-rate hike.Wednesday also features a heavy slate of macro data from Vietnam, including inflation, balance of trade, industrial production, and retail sales.Trading Economics expects Vietnam's May inflation to accelerate to 6% from 5.46% in April. Meanwhile, the data platform estimated the country's trade deficit could widen to $3.4 billion from $3.28 billion a month prior.Meanwhile, S&P Global will release the next batch of its PMI reports covering composite and services activity in China, India, Japan, Australia, and Hong Kong.THURSDAY, June 4Thursday will be relatively light on readouts, with Australia's April trade figures among the handful of releases of note.Australia is expected to post a trade surplus of A$2.6 billion in April, rebounding from a A$1.8 billion deficit in March - its first shortfall since late 2017, Westpac said in a preview.According to the bank, major commodity exports appeared to have increased notably during the period after recording three consecutive monthly declines.In Singapore, S&P Global's monthly PMI will be due, while Thailand will release a business confidence report.FRIDAY, June 5The tail end of the week brings a policy rate decision in India, which will also release its quarterly GDP growth figures.The Reserve Bank of India is expected to hold rates at 5.25% but could signal hawkish sentiment during its vote, the WSJ reported, citing a UOB economist.Meanwhile, a Trading Economics consensus placed the country's GDP growth rate at 7.3%, down marginally from the 7.8% recorded in the final quarter of 2025.ANZ Research said the economy stayed broadly healthy in the fiscal fourth quarter, although growth eased slightly in March as manufacturing, exports and profit margins came under pressure due to global disruptions, the WSJ reported.Taiwan is set to report monthly inflation data, with ING expecting consumer prices to rise above the 2% target for the first time since April 2025. The bank expects inflation to accelerate to 2.2% year on year in May from 1.7% in April, reflecting Taiwan's reliance on imported energy, which leaves the economy vulnerable to higher global prices."We expect inflation to peak toward the middle of this year, raising the risks for a potential central bank rate hike at the coming meetings," ING said in a preview.Thailand and the Philippines will similarly report their respective inflation rates for May, with the latter also releasing industrial production stats.Lastly, Singapore will report its retail sales figures for April.

Market Chatter: Indonesia Offers Tax Exemptions to Natural Commodity Exporters Parking Earnings in Local Banks

The Indonesia government is incentivizing exporters of natural resources to place their earnings in state-owned banks by offering tax exemptions, The Jakarta Globe reported May 31.The move comes under a revised policy mandating parking earnings in state-owned banks for a designated period of time that took effect June 1."The income tax rate becomes 0%" for exporters complying with the regulation, the news outlet reported, citing Finance Minister Purbaya Sadewa.The extent of tax exemptions will reportedly be dependent on the length of time for which an exporter's earnings are retained within the country.Under the revised rules, most natural commodity exporters are mandated to deposit 100% of their export proceeds in Indonesia banks for a minimum of 12 months, while oil and gas exporters need to park 30% earnings for at least three months.The conversion of export proceeds into the rupiah from foreign currencies has also been capped at 50%, according to the report.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Indonesia Starts Rollout of Commodity Export Centralization Plan

Indonesia has initiated the rollout of its plan to centralize exports of key commodities, requiring coal, palm oil and ferroalloy producers to submit export documents to newly formed state-owned firm Danantara Sumberdaya Indonesia from June 1, Bloomberg News reported Sunday.The company, owned by sovereign wealth fund Danantara, will take over some export functions as early as September and no later than Jan. 1, Coordinating Economic Affairs Minister Airlangga Harriet said on Sunday. The firm is still setting up its governance structure and hiring staff, according to the report.The plan has created uncertainty among natural resource producers, with many saying they do not yet have enough details to assess its impact. It has also raised concerns about possible supply disruptions from the world's top exporter of coal and palm oil. State-owned miner (IDX:ANTM), and Vale Indonesia (IDX:INCO) said the policy is expected to have little or no impact on their businesses, the news outlet said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: US, Iran Reach Tentative 60-Day Ceasefire Extension

The U.S. and Iran have tentatively agreed to extend a ceasefire for two months while initiating new negotiations over Tehran's nuclear program, fueling optimism that the ongoing three-month conflict may soon end, Bloomberg News reported on Thursday, citing a source familiar with the discussions.The anonymous source confirmed a prior Axios report, though President Donald Trump has not yet signed off on the terms, the newswire said.While both sides have previously celebrated progress and Trump has often claimed a deal was imminent, the impasse has repeatedly persisted, the publication said.Vice President JD Vance told reporters that the two nations are exchanging proposals on specific language regarding Iran's nuclear capabilities, and noted that Iran appears to be engaging in good faith, with tangible progress underway, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Indonesia Delays EV Subsidy Program

The Indonesian government pushed forward an electric vehicle subsidy program as it reviews several fiscal and technical assessments, the Jakarta Globe reported Tuesday, citing Finance Minister Purbaya Sadewa.Purbaya reportedly said the program will be delayed a month beyond the previously scheduled release in June as the government finalizes certain calculations.The finance minister did not elaborate on what aspects of the program remain under review which could subsidize a total of 200,000 EV units, made up of 100,000 cars and 100,000 motorcycles, the report said.Previously available figures placed the incentives at $281 per motorcycle while those for electric cars were still under discussion.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Indonesia Urges Industries to Expand Local Currency Use in Imports

Indonesia has called on industrial players to increase the use of local currency transactions for raw material imports in an effort to reduce dependence on the U.S. dollar and limit exposure to exchange-rate volatility, Xinhua reported Tuesday.The Industry Ministry said about 24% of raw materials used by domestic industries are still imported, leaving manufacturers vulnerable to fluctuations in the rupiah. Ministry spokesperson Febri Arief said wider use of local currency settlements would help ease pressure on businesses caused by the weaker rupiah, according to the report.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Indonesia Probes Major Palm Oil Firms Over Alleged Export Under-Invoicing

Indonesia has launched investigations into major palm oil producers over alleged under-invoicing and transfer pricing practices tied to commodity exports, Nikkei Asia reported Tuesday, citing Finance Minister Purbaya Sadewa.The companies under scrutiny include Wilmar Group (SGX:F34), Musim Mas and Salim Ivomas (IDX:SIMP), according to Purbaya, who said authorities had identified discrepancies in export volumes and transaction values, the news outlet reported.Purbaya alleged some exporters used Singapore-based trading firms to report export prices at roughly half their actual value, describing the practice as a form of smuggling and under-invoicing as much as 50%, according to the report.He said authorities have so far investigated 20 companies, with larger firms prioritized for enforcement action. The government is also using artificial intelligence tools to identify additional cases, Nikkei Asia reported.Wilmar, Musim Mas and Salim Ivomas did not immediately respond to' request for comments.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Indonesian Prosecutors Investigate Palm Oil Export Manipulation

Indonesia's Attorney General's Office is planning to scrutinize crude palm oil exporters over alleged export price manipulation, The Jakarta Globe reported Tuesday."We are currently in the investigation stage regarding alleged manipulation or transfer pricing practices," the newswire said citing Syarief Sulaeman Nahdi, director of investigations at the Attorney General's Office.The probe, which has been ongoing for a month, recently found 10 firms potentially involved in the manipulation of palm oil export transactions based on data from Finance Minister Purbaya Yudhi Sadewa, according to the report.Purbaya has earlier reportedly said an inquiry has been ongoing for a few months and the government is waiting for findings from the Attorney General's Office and auditors regarding the suspected malpractices."I selected the 10 largest companies for examination, but in total, we have reviewed more than 15 companies. That is only in the [crude palm oil] sector. We have also found interesting indications in the coal sector," Purbaya said and The Jakarta Post reported.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Indonesia Forms Entity for State-Owned Industrial Estate Management

Indonesia is bringing the management of various industrial estates owned by the state under a new holding firm, Kawasan Industri Indonesia, The Jakarta Globe reported May 25.The move led by Danantara aims to simplify the management structure of these estates, enhance integration, and boost investment appeal, the newswire said, citing Danantara Indonesia Chief Operating Officer Dony Oskaria."We are changing the business model to focus specifically on industrial estates," Dony said, emphasizing efforts to separate industrial estate operations from other business activities.As a result, Danareksa, which previously oversaw the industrial estates, will shift its focus to asset management.The new company "is expected to become one of the key drivers for attracting investment," Dony added.The restructuring is slated for completion in 2026, following which Kawasan Industri Indonesia will begin operations in 2027, Dony said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Indonesian Lawmakers Propose Omnibus Bill to Shift State Investment Oversight to Danantara

Indonesian lawmakers are looking into making revisions to multiple state finance laws under an omnibus bill, Reuters reported Monday, citing Mukhamad Misbakhun, head of the parliamentary financial ​commission.The revision bill will reportedly be drafted to shift the management of state investments to sovereign wealth fund Danantara, from the finance minister previously, Misbakhun said.As part of the move, dividends from state-owned firms may be redirected to Danantara instead of into the national budget, according to the report.Fiscal deficit limits will not be the target of the revisions, according to the report citing the lawmaker. "We are not heading into that situation yet," he said.Indonesia's parliament will finish modifications to the financial system law before starting work on the omnibus bill, according to the report.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Indonesia Finalizing Details for Centralized Export Policy

Indonesia will share updates about its centralized export management policy with key stakeholders soon, Bloomberg reported May 25 citing Vice Minister of Trade Dyah Roro Esti Widya Putri.Danantara Sumberdaya Indonesia, the government entity that will control commodity exports including palm oil, nickel, and coal, will mandate exporters to report sales of strategic commodities from June 1.Speaking about the policy during a Bloomberg interview, Roro said the move, which is essential to protecting the country's national interest, "is very new, it's still under progress.""We are going to see how this progresses over the next few weeks to come," she added.Once details are finalized, the state firm will take charge of export contracts, shipping, and payments, according to the report.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Indonesia Drafts Rules to Broaden Oil Importers, Opens Path for Russian Supply

Indonesia is drafting new rules that would expand the number of entities allowed to import crude oil, including state-linked agencies, with a framework that could allow Russian purchases despite Western sanctions, Jakarta Globe reported Monday, citing a senior energy ministry official.Director General of Oil and Gas, Laode Sulaeman, said state oil firm Pertamina currently manages crude imports but direct purchases from Russia are complicated by its exposure to global capital markets and bond covenants. He added that authorities are working on a new import framework to ensure any transactions comply with Pertamina's international financing obligations, the report said.The proposal follows a crude supply agreement reached with Moscow after President Prabowo Subianto's visit to Russia, with Indonesia reportedly planning phased purchases of around 150 million barrels through year-end, the news outlet said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Indonesia to Offer Flexibility for US Exports Under Earning Retention Policy

Indonesia is easing rules requiring natural resource explorers to retain a portion of their earnings in state-owned banks for mining exports to the US, among other countries, The Jakarta Globe reported Thursday, citing a senior official.Under a new policy, the state is requiring businesses to place 100% earnings into state-owned banks for at least a year, except firms in the oil sector, which need to park 30% for a minimum of three months.However, companies exporting to nations with trade agreements or a mutual understanding with Indonesia will see some flexibility, the report said, citing Chief Economic Affairs Minister Airlangga Hartarto.They will be required to put 30% of the proceeds for at least three months in state or certain non-state banks fitting specific criteria, the report quoted Airlangga as saying.Airlangga identified the U.S. as a trade partner eligible for the exemptions without naming any others. The two nations had signed a tariff deal in February, according to the report.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Indonesia and Malaysia Allow Ownership Change of Oil, Gas Assets to Petronas-Eni JV

The governments of Indonesia and Malaysia gave a go-ahead for the transfer of certain oil and gas block ownership from Malaysia's Petronas and Italy's Eni to their JV firm SEARAH, Reuters reported Thursday citing a Petronas executive.The approval is reportedly for the transfer of the assets' production-sharing contracts to the joint venture, the head of Petronas in Indonesia ​told Reuters at an Indonesia Petroleum Association conference.The parties had, in November, agreed to form a JV company to manage 19 assets, of which 14 are in Indonesia and five fall in Malaysia.The deal is expected to be completed by July 1, the newswire said, citing the executive.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)