Growth rates for the shipping, air, and rail industries in Indonesia are forecast to present a mixed demand picture during 2015, according to a new report.
“Indonesia Shipping Report Q1 2015″ from Business Monitor International (BMI) predicts a slight pickup in pace at the port of Tanjung Priok in North Jakarta, the country’s biggest seaport, while demand will decelerate a little at the smaller facility at Palembang, the capital city of the South Sumatra province.
“This reflects the slightly mixed freight demand picture as the Indonesian economy is set to slow marginally, while foreign trade picks up pace compared to 2014,” said the report.
BMI is trimming back its forecast for Indonesian gross domestic product (GDP) growth in 2015 by half a percentage point to 5.5%, down from 6% previously, but maintaining its estimate for 2014 growth at 5.1%.
The more cautious outlook for 2015, the paper said, arises from “the combined effects of tighter monetary policy, the adjustment caused by the reduction of petrol price subsidies, and a mixed export outlook, influenced by the slowdown in the Chinese economy.”
Despite this, BMI said it remains optimistic about the medium-term outlook for the country, and in the period running up to 2019, it expects GDP growth to average a healthy 6.3%.
Air cargo, rail freight outlook
BMI also makes predictions for the air cargo and rail freight sectors with its “Indonesia Freight Transport Report Q1 2015.”
In its forecast for this year, it said cargo volume growth will continue at a similar pace to 2014, as both GDP and foreign trade expansion will support the freight sector.
Airfreight volumes are seen to expand by 7% in 2015, with average annual growth of 7.1% during the forecast period to 2019.
On the other hand, rail freight volumes are estimated to rise by 7.5% in 2015, with average growth of 7.7% during the forecast period.
Said BMI: “In the medium to longer term we continue to think that the key to sustainable growth is investment in port infrastructure, including road and rail links in the hinterland areas. We are encouraged to see that the new government wants to push forward on this front. Capacity problems remain an issue, but new investment projects in ports, airports, road, and rail are being launched.”
Photo: Tanjung Priok
