The Nightmare Is Over

Posted on June 21st, 2009 at 8:04 am by Ian


Indonesia’s 1st quarter GDP data is rather weak. Nevertheless, it appears that the economy will not deteriorate further. In fact, there are early indications that it will soon start to pick up its pace again. In the first quarter of 2009, the economy grew by 4.4 percent year-on-year (yoy) or slightly slower than the 5.2 percent yoy growth in the fourth quarter of 2008 and down from the 6.4 percent Year on Year growth pace in the third quarter of 2008.

Compared to other countries however, Indonesia has been spared the worst of the global economic downturn. Indeed, some economists have predicted that only three other countries besides Indonesia will post positive economic growth this year, they are China, India, and Vietnam. Well, Vietnam posted a great dip in the 1st quarter 2009, if i am not mistaken.

The first quarter GDP data suggests that the Indonesian economy will continue to grow in 2009. Why this data is important? Anyone?

This upbeat prognosis will boost investor sentiment, boosting Indonesia’s attractiveness as an investment destination relative to some neighboring countries whose economies are in disarray. It is said that to boost economy to achieve two-digit level, Indonesia at least need $20 billion in the next 4 years. Not really impossible, but not too easy though.

This helps to explain the stellar performance of Indonesia’s capital markets this year where the benchmark JCI has already gained around 53.4 percent year-to-date. Quite impressive, isnt it?

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