Indonesia investment expected to slow in 2014

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Indonesia investmentIndonesia expects investment to slow in 2014, as companies may hold off during an election year, providing less stimulus to an economy grappling with weaker growth and a current-account deficit, Bloomberg reported.

Total investment in 2014 is expected to grow 15 per cent to about $38 billion, after rising 27.3 per cent last year, Mahendra Siregar, chairman of the Indonesia Investment Coordinating Board, said. Total investment in 2013 was the highest since 2010, he said.

Sluggish investment, weaker external demand and higher interest rates mean Indonesia’s economic growth will slow to between 5 and 5.5 per cent in 2014 and 2015, the International Monetary Fund projected in an annual assessment on December 16. The Southeast Asian nation is relying on investment to make up for flagging exports as it seeks to narrow a current-account gap that led the rupiah to be Asia’s worst performing currency in 2013.

President Susilo Bambang Yudhoyono, whose second term ends this year, has promised to build more roads, bridges and ports to help attract investors, even as progress remains limited. The government in December 2013 announced new rules that ease some restrictions on foreign ownership, including allowing foreigners to own as much as 49 per cent of airports and 100 percent of power plants built under public-private partnerships.

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Reading Time: 1 minute

Indonesia expects investment to slow in 2014, as companies may hold off during an election year, providing less stimulus to an economy grappling with weaker growth and a current-account deficit, Bloomberg reported.

Reading Time: 1 minute

Indonesia investmentIndonesia expects investment to slow in 2014, as companies may hold off during an election year, providing less stimulus to an economy grappling with weaker growth and a current-account deficit, Bloomberg reported.

Total investment in 2014 is expected to grow 15 per cent to about $38 billion, after rising 27.3 per cent last year, Mahendra Siregar, chairman of the Indonesia Investment Coordinating Board, said. Total investment in 2013 was the highest since 2010, he said.

Sluggish investment, weaker external demand and higher interest rates mean Indonesia’s economic growth will slow to between 5 and 5.5 per cent in 2014 and 2015, the International Monetary Fund projected in an annual assessment on December 16. The Southeast Asian nation is relying on investment to make up for flagging exports as it seeks to narrow a current-account gap that led the rupiah to be Asia’s worst performing currency in 2013.

President Susilo Bambang Yudhoyono, whose second term ends this year, has promised to build more roads, bridges and ports to help attract investors, even as progress remains limited. The government in December 2013 announced new rules that ease some restrictions on foreign ownership, including allowing foreigners to own as much as 49 per cent of airports and 100 percent of power plants built under public-private partnerships.

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