Indonesia Booming As Foreign Investors Seek China Alternatives 

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By: Dezan Shira & Associates

The Indonesian economy is becoming the darling of Asia as economic growth hits 5.0 percent and the stock markets booms as foreign investors pour money into the country. The 2016 GDP growth rate, released by the Indonesian Central Statistics Agency last week, exceeds growth figures of 4.8 percent seen in 2015. Of this growth, part came from a healthy 5 percent increase in domestic consumption, while Indonesian imports and exports also increased, as did investment.

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“We are seeing a gradual improvement in Indonesian habits” says Chris Devonshire-Ellis, Chairman of Dezan Shira & Associates. “Indonesians are both spending and producing more, and this is turn is driving FDI into the country. Indonesia is also enjoying a renewed resurgence from across Asia as a result, and is also benefiting from the China effect; increasing production costs on the Chinese mainland are gradually moving some production away from the PRC and into markets such as Vietnam and Java. Our firm is seeing an active increase of foreign investment interest into Indonesia.”

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This interest is also mirrored in the local stock market, which has seen foreign capital worth US$2.2 billion take up residence over the past twelve months. The Indonesian stock market is measured both in local Rupiah and US Dollars, in the Rupiah index growth achieved a 26.7 percent increase in 2016 and the US Dollar index grew by 48.2 percent – the best performance in the Asia Pacific region over the past twelve months.


Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in Indonesia, China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.


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