Singapore (Apr 16): The Indonesian economy is in decent shape and likely to do better. Economic growth is picking up speed, inflation is low, the external position is holding up, infrastructure spending is rising and foreign investors are increasingly warming to its massive consumer market, low costs and political stability under a reformist president. Given the large domestic market, the country is less vulnerable to the spectre of protectionism, which is currently haunting Indonesia’s more trade-dependent neighbours.
Yet, despite all the good things happening, there is a lingering doubt. The question is, can the recovery go beyond a commodity-price-driven cyclical uptick to achieve growth rates similar to that of China, India or the Philippines?
Cyclical trends: Firming growth and good readings on economic stability