50924
Indonesia Gravitating Above the Turmoil
Indonesia Gravitating Above the Turmoil

Indonesia Gravitating Above the Turmoil

Indonesia Gravitating Above the Turmoil

There’s more to Asia’s vast economy than just China and Singapore, both linchpins of regional growth.
Indonesia is slowly but surely cementing a reputation as a standout in the global economy, aided by a strong domestic economy and a government embracing pro-market reforms. With that in mind, the country recently saw its strongest growth in more than three years.
“Indonesia has been one of the stronger performing EM countries this year outside of countries like Brazil,” Clayton Fresk, portfolio manager at Stadion Money Management, which is based in Watkinsville, Georgia, and manages nearly $4 billion in assets, told CNBC recently.
“After experiencing a stable decline in growth since 2010 through mid-2015, that trend has reversed and the country is seeing small improvements in that reading over the past year,” Fresk added, with employment on the rise and interest rates on the wane.
As China’s slowing growth spills over into other developing economies in the region, Indonesia is gravitating above the turmoil. Earlier this year, the International Monetary Fund’s mission chief for Indonesia gave the government credit for its economic competence, and expects its economy to grow by 5% this year.
Analysts say Indonesia’s success is all the more impressive as major economies around the world continue to hew to loose monetary policies—which haven’t gotten them much bang for their buck—and developing economies struggle.

  Favorable Demography
“Against this backdrop it is hard to find structural and sustainable growth stories,” Smriti Shekhar, portfolio manager with NN Investment Partners’ equity markets group told CNBC in a recent interview.
Indonesia’s vast population exhibits favorable demographics such as high life expectancy and fertility rates. Investors also like growth prospects, fiscal discipline and relatively low inflation of around 3-5%, making the country what Shekhar calls a “standout as an attractive market.”
Indonesia’s reform credentials have also stood out in 2016 with a new government, improved economic fundamentals, tax reform and the appointment of a credible new finance minister who was a former IMF official.
Foreign investors have lapped up Indonesian bonds at a very high rate—at least 40%, according to recent data—underscoring how the country’s relative attractiveness, but stoking concerns with the country’s officials.
In a research note to clients this week, Bank of America-Merrill Lynch recommended maintaining exposure to long-dated Indonesian debt, based on “a supportive stance from global central banks” boosting the attractiveness of emerging government bonds.

Short URL : https://goo.gl/XDGFuS
  1. https://goo.gl/p6ykBL
  • https://goo.gl/v4v4aM
  • https://goo.gl/s108zW
  • https://goo.gl/FI1OwF
  • https://goo.gl/hc8l90

You can also read ...

Report says China’s economic development must rely on integration between innovation and industrial production,  and work must be done to ensure that innovation progress was passed on to production.
China's new economy will account for an estimated 12% of the...
The process of building a new government could take weeks, so markets may well move on from the result quickly.
Politics dominated trading on Monday, with the euro sliding as...
World countries are casting a shadow on the future of the global economic system.
Next month, when finance ministers and central bank governors...
The economy’s return to growth has eased pressure  on the authorities.
Now that Nigeria’s economy is recovering from its worst slump...
One mining services company said it laid off more than 50 employees.
New laws and a crackdown on mining firms in Tanzania has...
EU Seeks Protection for Uber-Style Jobs
The European Commission said on Monday it wants more social...
US to See Slower Growth
The pace of US economic growth will stay stuck in the low 2%...
The Housing Pulse rose again, as the shortage of supply and increasing demand for properties continues to bite.
Bank of Ireland’s monthly Economic Pulse report, which...

Add new comment

Read our comment policy before posting your viewpoints

Image CAPTCHA
Enter the characters shown in the image.

Trending

Googleplus