Asia Economy

Inflation in Indonesia picked up in the early months of 2013, as rising prices have constrained the Bank of Indonesia’s (BI’s) ability to loosen monetary policy to encourage GDP growth, with possible further rate rises to come. However, the robust economy is unlikely to suffer much as a result, particularly if other pro-growth measures are taken.

With programmes aimed at boosting education and rural development gaining pace, Sabah’s government will be hoping that its move to calm investors by setting up a regional security zone following an incursion in February proves effective.

While growth in Brunei Darussalam’s economy has slowed in recent years, a rising contribution from the non-oil and gas sectors, particularly agriculture, indicates that efforts to accelerate diversification are producing results.

While a fiercely fought general election could send ripples through Malaysia’s economy in the next few months, the country otherwise looks set for another year of solid growth on the back of strong domestic demand and higher private investment driven by a number of public sector initiatives.

A new foreign investment law that offers investors broader access to Myanmar’s economy, as well as useful tax breaks, is expected to add new impetus to the country’s development and is a landmark in its ongoing liberalisation. On November 2, President Thein Sein approved the much-anticipated law after several months in which the government and economic stakeholders debated and honed the legislation.

Lower-than-expected economic growth for 2012 in Indonesia has been widely attributed to uncertainty in the global economy, with rising domestic demand and investment levels set to back growth in 2013.