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Jakarta Post

Economy risks losing momentum: Experts

  • The Jakarta Post

Jakarta   /   Fri, November 5 2010   /  10:43 am

The Indonesian economy has never looked better, with significant improvements in key areas, but economists and business players have warned of flaws that could deter investors.

Indonesia’s gross domestic product is expected to grow by more than 6 percent this year, up from 4.5 percent in 2009, fueled by higher exports, increased investment and strong consumer spending. Inflation is contained, stock prices are at record levels, and the rupiah has also strengthened.

Capital is also flowing in in large quantities, both for portfolio and physical investment, as Indonesia maintains economic and political stability.

Most rating agencies have ranked Indonesia a notch or two below investment grade, which means it is at a low risk of defaulting. Several Japanese rating agencies have already given Indonesia the top rating.

However, as with most good news there is al...