Indonesia

After several years of strong credit growth in Indonesia, recent interest rate increases are expected to slow lending, allowing banks to take stock and reducing the risk of exposure to bad loans.

With Indonesia’s new universal health care programme expected to put pressure on the public hospital system, investors are looking to develop private sector medical facilities as an alternative for the growing middle class.

A combination of short- and long-term factors are putting at risk Indonesia’s position as one of the world’s leading coffee producers, while rising domestic demand could eat into stocks available for the profitable export market.

Plans to consolidate Indonesian tourism growth from the first quarter include branching out into new areas such as Islamic heritage, sport and health tourism, but critics say it should first improve basic infrastructure and facilities.

Like bourses in many other emerging markets, the Indonesia Stock Exchange (IDX) has been on a downward trend since late May, as the US Federal Reserve has made clear that it will scale back its stimulus programme. However, authorities have taken steps to strengthen the market, including propping up the rupiah, and many of the IPOs scheduled for the coming months appear to be on track, suggesting that any difficulties could be short-lived.

Efforts are under way to boost Indonesia’s relatively low levels of internet penetration, with both the public and private sector taking steps to increase access in under-served segments of the market.