EICN Kuala Lumpur – Hot Spots: Indonesia

Falling global commodity prices and economic slowdowns in several major economies weighed on Indonesia’s external sector in 2023. However, the outlook going into 2024 is supported by our expectation of an increase in government spending. Ahead of the general elections in February 2024, fiscal policy was loosened as the incumbent administration undertook populist spending measures and offereds fiscal incentives, which will directly and indirectly (through a multiplier effect on private consumption) contribute to real GDP growth.

Indonesia is the sixth-biggest emerging market by GDP, and in the past decade has grown faster than any other $1trn-plus economy bar China and India. A source of dynamism is digital services, which are helping create a more integrated consumer market, with over 100m people collectively spending $80bn a year on everything from e-payments to apps for on-demand trucking.

What will the new administration look like? Will Prabowo, as most people expect, continue the policy direction from the Jokowi administration? What new features will he put on it? We will discuss:
– Economic and political outlook for Indonesia
– Business environment
– Foreign relations and trade
– Domestic consumption
– Industry spotlight