Indonesia to spur Asian growth
Cemtech Asia 2013 will welcome international cement delegates to its conference and exhibition this month in Jakarta, Indonesia. Ahead of this leading regional industry event, ICR highlights recent developments and assesses future prospects for this thriving market.
The Republic of Indonesia consists of 17,508 islands (of which about 6000 are inhabited). The country has a market-based economy in which the government plays a significant role.
Indonesia’s economy has navigated a steady path to recovery since it was hit by the Asian Financial Crisis in 1997. It has enjoyed economic growth trending at over five per cent per annum for 10 years and reached a solid 6.2 per cent in 2011 – its fastest annual rate for 15 years. These advances have been supported by low inflation and interest rates. More importantly, this growth has been widely distributed across the nation as areas outside the main island of Java have benefitted from high commodity prices.
In 2011, on the back of political stability and strong economic growth, foreign direct investment (FDI) hit an historic high of US$20bn (+18 per cent versus 2010)while domestic investment was equivalent to about US$7.5bn (+70 per cent. Major foreign investors originated from Singapore, USA, Japan, The Netherlands and South Korea. The main investment sectors were transportation, mining and utilities.
In addition, Fitch Ratings and Moody’s have recently upgraded Indonesia’s credit rating back to investment grade, 15 years after it was lost during the Asian Financial Crisis. This further solidifies the country’s economic outlook and should help to sustain further high levels of foreign and domestic investment.