2018 EXPLORING NEW SOURCES OF GROWTH IN SOUTHERN PART OF WEST JAVA IN ORDER TO ENHANCING WEST JAVA INVESTMENT AND ECONOMIC GROWTH 40 Area : 35.377,76 km2 Coordinates : 6o45’S 107o30’E Topography : Lowlands, Mountains, & Coasts Populations : 48,037,83 (2017) Density : 1,358 people per sq km (2017) Productive age : 32.67 million (age 15-64) -2017 Min. Wage Rate : USD 120.24 – USD 301.56 (2019) Governor : Moch. Ridwan Kamil Vice Governor : Uu Ruzhanul Ulum Capital City : Bandung City Regencies/Cities : 18 Regencies and 9 Cities 48,03 M 24% 13,09% 19% 12,9% Economic Growth of All Provinces in Java National and West Java Economic Growth (yoy) 8.0 West Java National 5.50 6.0 4.0 5.18 2.0 0.0 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 2013 2014 2015 2016 2017 2018 Top Sectors with Highest Contribution to GRDP (as of Q4-2018) AGRICULTURE MANUFACTURING 7% 43% In Q4-2018, West Java economic growth slightly 13.49 declined to 5,50% (yoy). However, such growth was 7.24 6.55 6.84 5.40 still stronger than national performance at -0.54 -0.16 -0.34 Q1-2018 Q2-2018 Q3-2018 Q4-2018 5,18% (yoy). West Java growth in Q4-2018 was Q1-2018 Q2-2018 Q3-2018 Q4-2018 supported by sharp growth of over 10% in TRADE & RETAIL CONSTRUCTION agriculture, robust construction growth as well as 15% 9% consistent performance in manufacturing industry 5.06 4.92 9.28 3.85 3.03 6.81 6.91 7.13 and trade & retail. Q1-2018 Q2-2018 Q3-2018 Q4-2018 Q1-2018 Q2-2018 Q3-2018 Q4-2018 In February 2019, West Java CPI recorded a deflation at 0,05% (mtm), increased compared to infation in the month earlier of 0,33% (mtm). Consequently, on annual basis, CPI inflation stood at 2,61% (yoy), still within the national target corridor of 3,5±1% (yoy). CPI inflation remained controlled within the target as supported by deflation in administered prices and also volatile food. Inflation of All Provinces in Java Core inflation in February 2019 remained under control at a low level, both monthly and annually which was recorded at 0,26% (mtm) and 3,46% (yoy) accordingly. Administered prices in February 2019 experienced deflation of 0,05% (mtm), increased from deflation in the previous month of 0,51% (mtm). In annual terms, AP inflation was recorded at 2,31% (yoy). Volatile food in February 2019 was recorded a deflation at 1,05% (mtm). In National and West Java Inflation annual terms, the VF inflation was % (yoy) West Java National recorded very low at 0,13% (yoy), 8.0 significantly decreased from 1,66% (yoy) in the month earlier. 6.0 4.0 Inflation in February 2019 was supported by commodities in core inflation that 2.0 2.57 include residential rental and train cost. 0.0 While the deflation was boosted by food 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 commodities, including egg, shallot, and 2015 2016 2017 2018 2019 red chili. • Since 2013, West Java keeps an outstanding record of positive net exports over the years. Up until the end of 2018, West Java foreign trade balance continues to record positive net exports, supported by the strong export growth and decreasing import growth. • West Java exports were supported by 5 (five) main sectors which are: Manufacturing, Textile, Electronics, Rubber and Plastics as well as Automotive. Growth in Exports of Goods % (yoy) % (yoy) USD billion USD billion Positive Net Exports over the Years 200% Manufacturing (rhs) Textile 40% 4.67 5.0 Electronics Rubber & Plastics 8.0 30% 4.5 150% Automotive 7.0 4.0 7.51 20% 6.0 3.5 100% 5.0 3.0 7.0% 10% 4.0 2.5 50% 2.84 2.0 0% 3.0 1.5 2.0 0% -10% 1.0 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II 1.0 0.5 -50% 2012 2013 2014 2015 2016 2017 2018 -20% 0.0 0.0 %60 (yoy) I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV Total Export USA 2013 2014 2015 2016 2017 2018 40 Europe ASEAN Surplus/Deficit (rhs) Export Import 20 • West Java export in Q4-2018 decreased by 6,8% (yoy). Its import 3.85 was also in downward trend by 4,9% (yoy). These events led to 0 slightly decreasing growth in West Java net export by 7,9% (yoy). -0.69 -20 • Based on country of destination, exports to most of major trading I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV partners were in downward trend, except USA. 2013 2014 2015 2016 2017 2018 The average minimum wage in West Java for the periodof 2019 of 2019 is around2.731.081,49 Rp.2.731.081 (USD (USD 194.52) 194,52) per permonth. month. Karawang Regency has the highest wage with Rp.4.234.0104.234.010,27 (USD (USD 301.56) 301,57) per per month month.. Banjar City has the lowest wage withrate withRp. 1.688.217,52 Rp.1.688.217 (USD (USD 120,24) 120,24) per permonth. month . Minimum Wage Rate per Month City/Regency In IDR In USD* Karawang Regency 4.234.010 301,57 Bekasi City 4.229.756 301,26 Bekasi Regency 4.146.126 295,31 Depok City 3.872.551 275,82 Bogor City 3.842.785 273,70 Bogor Regency 3.763.405 268,05 Purwakarta Regency 3.722.299 265,12 Bandung City 3.339.580 237,86 Industrial zones & West Bandung Regency 2.898.744 206,46 Sumedang Regency 2.893.074 206,06 big cities have the Bandung Regency 2.893.074 206,06 highest wage rate Cimahi City 2.893.074 206,06 Sukabumi Regency 2.791.016 198,79 Subang Regency 2.732.899 194,65 Cianjur Regency 2.336.004 166,38 Sukabumi City 2.331.752 166,08 Indramayu Regency 2.117.713 150,83 Tasikmalaya City 2.086.529 148,61 Tasikmalaya Regency 2.075.189 147,81 Cirebon City 2.045.422 145,69 Cirebon Regency 2.024.160 144,17 Garut Regency 1.807.285 128,72 Majalengka Regency 1.791.693 127,61 Kuningan Regency 1.734.994 123,58 Ciamis Regency 1.733.162 123,44 Pangandaran Regency 1.714.673 122,13 Banjar City 1.688.217 120,24 *) USD/IDR Exchange Rate per March 1st , 2019: USD 1 = Rp.14.040.00 Data as of December 2017 Bekasi City HDI : 80,30% WEST JAVA Population : 2,85 million Bandung City Depok City Eco growth : 6,63% HDI : 70,69% HDI : 80,31% Population : 48,03 million HDI : 79,83% Population : 3,65 million Population : 2,25 million Eco growth : 7,79% Eco growth : 5,29% Eco growth : 7,28% Cirebon City HDI : 74% Population : 313.330 Eco growth : 5,95% Bogor City HDI : 75,16% Sukabumi City Population : 1,01 million HDI : 73,03% Eco growth : 6,13% Population : 323.790 Tasikmalaya City Eco growth : 5,3% HDI : 71,51% Population : 661.400 Eco growth : 5,99% Resume of Banking Indicators – Conventional Commercial Banks in West Java By the end of 2018, West Java Loan-to-Deposit Ratio increased to 95,2% (yoy) while its credit growth slightly decreased to 12,1% (yoy). Furthermore, the NPL growth declined to 2,34% (yoy), accompanied by strong asset growth at 7,5% (yoy). Sectors with biggest credit share in West Java are Trade and Retail as well as Manufacturing industry. Rp trillion Asset Growth Rp trillion NPL Growth 5,358 12000 9,953.620% 6000 4% 9000 15% 3% 4000 7.5% 6000 10% 2.34%2% 2000 3000 5% 1% 0 0% 0 0% I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Total Asset Growth (rhs) Loan (by Location) NPL (rhs) Credit Share by Sector 30% LDR Development 100% 95.2% Trade & Retail 27.7% 95% Manufacturing 23.1% 20% Business Services 14.9% 12.1%90% Agriculture 9.4% 10% Construction 8.1% 85% Transportation &… 6.5% 5.6% 0% 80% Electricity, Gas, and Water 4.4% I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV Mining & Quarrying 3.6% Social Services 3.1% 2013 2014 2015 2016 2017 2018 0% 5% 10% 15% 20% 25% 30% Loan to Deposit Ratio (rhs) Credit Growth TPF Growth Resume of Banking Indicators – Sharia Commercial Banks in West Java By the end of 2018, West Java asset growth slightly increased to 8,2% (yoy), accompanied by significantly declining NPF to 2,35% (yoy). Furthermore, West Java Finance-to-Deposit Ratio decreased to 89,55% while its SME Share to Total Finance is relatively stable at around 21,7%.