Asia Economy

Indonesia is currently in the process of transforming from a resources- and consumption-based economy to a more manufacturing- and investment-oriented one, working to build an industrial base that will allow it to reduce its dependence on imports and keep more value within the economy. It is a vital transition, one that recognises the new realities of the global economy and at...

The burgeoning middle class has been a crucial growth driver for Indonesia over the past decade, helping mitigate investment risks and solidifying the foundation of economic growth. Expansion of this demographic is expected to continue, driving urbanisation and expanding a consumer class that will bolster growth across a range of sectors. However, incomes are still...

Indonesia’s GDP growth rate has been slowing for a number of years, falling from 6.5% in 2011 to 5% in 2014 and 4.7% in first-quarter 2015 – the lowest rate since 2009. From third-quarter 2014 to fourth-quarter 2014 the economy contracted 2%, and then in January 2015 the country experienced deflation of 0.2%, according to Bank Indonesia (BI). Foreign direct investment (...

With full-year realised foreign direct investment (FDI) hitting a new record in 2014, Indonesia’s trade and investment flows have improved considerably over the last 10 years. The capital account deficit was brought back under 3% that year, and at the end of 2014 and in early 2015 the country reported a trade surplus after years in the red. Due to stronger economic growth and...

In an effort to protect its domestic banking industry from foreign competition, the Indonesian government has imposed restrictions on foreign banks operating in the country, introducing ownership restrictions in 2012, and drafting new regulations that would oblige foreign banks to become locally incorporated entities. The nation’s banking sector has been criticised as too...