VIVAnews - DBS Bank Ltd evaluated that the Indonesian economy is still better compared to other Asian countries when it comes to the extent it is affected by the global financial crisis. The bank is optimistic that Indonesia can be a perfect place to invest equity instrument and fixed income.
Executive Director of Economic and Currency Research at DBS, David Carbon, said that the global economic crisis will slightly slowdown Asian economic growth.
According to Carbon, Indonesia will still offer more interesting interest rates compared to other countries. In addition, the GDP growth will be relatively higher. Indonesia may expect the Rupiah to improve by 10 percent in late 2009.
"High interest rate and 10 percent of currency improvement is the main ground to invest in fixed income in Indonesia. High growth and 10 percent of currency improvement will also inevitably trigger equity investment," he said.
Carbon acknowledged that the global financial crisis has caused the growth of Indonesian exports to fall by 36 percent to negative two percent a year in November 2008. However, Indonesia is more invulnerable to the crisis due to its large domestic market.
With export proportion of 26 percent of the GDP, exports have less impact on the Indonesian economy compared to other countries. Carbon also said that the GDP adjustment will not be too extreme compared to the 2000/2001 period when the economic growth plunged by 1.5 percent. "We are estimating that the Indonesia's economic growth will decrease by 4.8 percent in 2009 compared to 2008 with 6.2 percent," he said.
According to Carbon, the Asian economic slowdown is predicted to cause growth of only 2.5 percent. This is due to a contraction which would likely hit the US financial industry.
Translated by: Bonardo Maulana Wahono
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