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nvestors need not panic about the recent massive sell-offs in global equity markets as Indonesia retains its strong economic fundamentals, experts and government officials have said.

Anxiety among investors rose when the Dow Jones Industrial Average suffered a big fall of more than 1,100 points on Monday — the worst decline since 2011 — prompting plunges in global markets, including in Asia and Europe.

Investors fretted that the United States Federal Reserve (Fed) would increase its interest rates quicker as a result of projections of higher inflationary pressure, given rising wages in the world’s biggest economy after years of stagnation.

US President Donald Trump’s tax cut policy has also affected market perceptions, as it is thought it will lead to higher budget deficits, which will then prompt more bond issuances, triggering a rise in yields.

However, the Dow Jones, Europe and Asian markets rebounded again on Tuesday, followed by the Jakarta Composite Index (JCI) — the main gauge of the Indonesia Stock Exchange (IDX) – a day later, as it closed 0.87 percent higher than the previous day at 6,534.87.

Fear of massive capital outflows from emerging markets, including Indonesia, were unreasonable as investors would remain confident in the country’s economic fundamentals, said Chatib Basri, advisory board chairman of the Mandiri Institute.

“All of the macroeconomic indicators are good, so the potential for capital outflows is not as bad as we might imagine. This also help explains the fast rebound of the JCI,” he said on the sidelines of the 2018 Mandiri Investment Forum on Wednesday.

In fact, Indonesia’s foreign exchange reserves have been seeing continuous increases with the figure reaching US$131.98 billion as of January, higher than the $130.2 billion seen a month earlier, showing that the country received even greater capital inflows.

IDX president director Tito Sulistio has urged investors to stay calm amid the global volatility, pointing out that more companies would soon release their full-year financial performances for 2017 and this would restore market confidence.

Even though volatility will always be a global issue, the recent panic among investors would only be temporary as corrections were considered normal in stock markets, said Silvano Rumantir, president director of Mandiri Sekuritas.

He remained confident in the company’s JCI projection of 6,700 in 2018, with the optimistic case of 7,100 by the end of the year.

With economic growth of 5.07 percent in 2017, Indonesia is expected to be an attractive market for investment.

Indonesia has also gained investment-grade ratings from three global rating agencies, Moody’s, Fitch and Standard & Poor’s. Moreover, Fitch upgraded Indonesia’s credit rating again last year to BBB.

As the country was hoping for more private investment, Chatib, who is also a former finance minister, said the only way for Indonesia to expand its economic growth above 6 percent would be through boosting the manufacturing sector, including by giving more incentives to the textile industry, for instance, as it could employ many workers.

However, Indonesia’s manufacturing industry recorded weaker growth at 4.27 percent in 2017, compared to 4.29 percent the previous year, a decline that has been consistent since 2011.

Only four industries have been able to record growth above 5 percent, namely food and beverages, pharmaceuticals, basic metal and machinery.

Finance Minister Sri Mulyani Indrawati said the government was assessing continuously whether to provide fiscal incentives for each industry, adding that automotive and steel manufacturers had good momentum as they showed an average of 4 percent growth.

Besides boosting opportunities in the textiles sector, Chatib said a further streamlining of government regulations could also help boost investment in the manufacturing sector.