Strong Period

In March 2024, three global events emerged that could impact global equity markets. Firstly, The Fed’s meeting revealed projections for faster-than-expected US economic growth this year, while still indicating the possibility of interest rate cuts up to three times. The US economy is forecasted to expand by 2.1% in 2024, surpassing most other advanced economies and exceeding The Fed’s previous forecasts from three months ago. Despite expectations of slightly higher underlying inflation and a robust job market, Chairman Powell signaled that these factors would not deter the committee from reducing borrowing costs from their current 23-year high of 5.25%-5.5%.

Secondly, the China National People’s Congress in March set a GDP growth target of around 5% for 2024 but did not introduce a significant stimulus package to achieve this goal. Thirdly, the Bank of Japan made a historic shift by ending an era of negative interest rates, raising borrowing costs for the first time since 2007 as the country moves past decades of deflation. The BoJ announced its intention to maintain the overnight interest rate within a range of approximately zero to 0.1%, compared to the previous range of -0.1%.

Meanwhile, Indonesia’s domestic economy is influenced by consumption patterns, particularly as the country enters the festive season of Hari Raya Idul Fitri (Lebaran). Normalized high rice prices contribute to a more favorable overall economic environment. Additionally, market discussions have commenced regarding the implementation of the next government program, including a proposed free lunch program for school students, which could potentially stimulate consumption. Reported softness in car and motorcycle sales is attributed to anticipation surrounding the February elections. However, the purchase of high-value items is expected to improve, supported by certain banks’ promotion of credit growth.