Indonesia to be top 10 economy by 2025

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Gudang GaramThe Indonesian economy could grow to be among the world’s top ten largest by 2025 if more investments are placed in manufacturing, infrastructure development and urbanisation, according to a report by Citi Research, the economic research department of Citibank, released on March 21.

The report noted a 128 per cent jump in foreign direct investment from 2009-2012. Indonesia has recently said that foreign direct investments commitments as of 2012 stood at $86 billion.

“Indonesia’s market size and growth prospects are, and will be, the biggest draw for foreign investors, which explains the jump in foreign direct investment,” Citi said.

While Southeast Asia biggest economy is ranked a poor 59 in the World Bank’s logistics performance index, the government is pushing to accelerate and restart stalled infrastructure projects to catch up with its regional peers

“Within this context, the auto, banks, media, cement, toll roads, property and consumer sectors would be the biggest beneficiaries,” according to Citi.

Demand for homes, retail products, vehicles, education and white goods should increase faster than for basic goods, the report said.

The World Bank recently forecast that the Indonesian economy would grow by 6.3 per cent in 2013, though it warned that the risks to growth were increasing due to a failure to invest in infrastructure, as well as income inequality.

Inflation is expected at 5.5 per cent this year and 5.2 per cent in 2014, the World Bank projected.

However, investments are likely to face some headwinds from ongoing, and possibly further, regulatory uncertainties and political noise as the 2014 elections approach.

 

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Reading Time: 1 minute

The Indonesian economy could grow to be among the world’s top ten largest by 2025 if more investments are placed in manufacturing, infrastructure development and urbanisation, according to a report by Citi Research, the economic research department of Citibank, released on March 21.

Reading Time: 1 minute

Gudang GaramThe Indonesian economy could grow to be among the world’s top ten largest by 2025 if more investments are placed in manufacturing, infrastructure development and urbanisation, according to a report by Citi Research, the economic research department of Citibank, released on March 21.

The report noted a 128 per cent jump in foreign direct investment from 2009-2012. Indonesia has recently said that foreign direct investments commitments as of 2012 stood at $86 billion.

“Indonesia’s market size and growth prospects are, and will be, the biggest draw for foreign investors, which explains the jump in foreign direct investment,” Citi said.

While Southeast Asia biggest economy is ranked a poor 59 in the World Bank’s logistics performance index, the government is pushing to accelerate and restart stalled infrastructure projects to catch up with its regional peers

“Within this context, the auto, banks, media, cement, toll roads, property and consumer sectors would be the biggest beneficiaries,” according to Citi.

Demand for homes, retail products, vehicles, education and white goods should increase faster than for basic goods, the report said.

The World Bank recently forecast that the Indonesian economy would grow by 6.3 per cent in 2013, though it warned that the risks to growth were increasing due to a failure to invest in infrastructure, as well as income inequality.

Inflation is expected at 5.5 per cent this year and 5.2 per cent in 2014, the World Bank projected.

However, investments are likely to face some headwinds from ongoing, and possibly further, regulatory uncertainties and political noise as the 2014 elections approach.

 

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