TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Indonesia has to get its act together to benefit from trade war: Fitch
"I’ve been encouraged from the alignment of the messages and then the high understanding from the people on the things out there and that they still have a tough task to do over the next several weeks."
Change Size
Fitch Group president and chief executive officer Paul Taylor. (Fitch Group/Handout).
Usage: 0 (Fitch Group/Handout)
T
he trade tensions between the United States and China have dragged down global economic growth and resulted in the relocation of many production facilities.
In the financial market, high-yielding emerging market assets have become the destination to invest in for global funds, as central banks in countries around the world embark on an easing cycle by cutting benchmark interest rates.
Fitch Group president and chief executive officer Paul Taylor talked about these issues with The Jakarta Post’s Vincent Lingga, Esther Samboh and Riska Rahman, and how Fitch positions itself in the middle of such economic conditions. The following are edited excerpts of the interview.
Question: How is Indonesia positioned with regard to the rest of the world in this time of very uncertain economic conditions and against the backdrop of the trade war and Brexit uncertainties?
Answer: Our overall view is that we will see an economic slowdown next year. I think what’s a little bit unusual about next year is that it's going to be a coordinated slowdown because we see in 19 out of the world’s 20 biggest economies’ GDP growth will decline next year.
(The trade war) is a big issue not just between the US and China, it's the secondary effects that we think is the biggest problem. If you look at Europe at the moment, Europe has very slow growth, struggling with growth. Partly to do with Brexit, but it's actually more to do with how open the big European economies are and how they have been affected by the slowdown in China. The impact of the trade dispute is not just in the US, not just in China, it spreads out across the world.
Interestingly in this region, in this case Indonesia, one of the fall-out effects we've seen here is to see a lot of movement of industrial capacity to other countries. Vietnam, in particular, has benefited. Thailand has benefited. I don't think Indonesia has benefited up until now. There has to be an opportunity because the trade dispute is not going away.
