Indonesia: a crown jewel

July 20, 2023

Arriving in Indonesia recently, the sights and sounds of Jakarta stopped us in our tracks. Innovative, state-of-the-art offices and high-end shopping malls were immediately apparent, and we didn’t waste a moment when it came to immersing ourselves in this buzzing, vibrant city.

As we took in Ashta District 8 – a gleaming new lifestyle hub in the CBD – we reflected on the following interesting points:

  • Indonesia is now one of the fastest-growing and strongest economies, not only in Southeast Asia but also in emerging markets (“EM”). GDP growth in 2022 was 5.3% and a similar number is expected for 2023[1].
  • As one of the “fragile five” back in 2013, Indonesia’s reliance on the US dollar was strong, and when the Fed tightened, it would be negatively impacted. The country has now moved to a current account surplus, thanks to the focus on downstream products exports.
  • The government has set up 'Vision Forward Indonesia 2045', which aims to significantly transform Indonesia, with the target of becoming one of the world's top five economies by the time it reaches its centenary in 2045[2].
  • Politics was a topic of discusson but local people seem relaxed about the outcome of the upcoming 2024 general elections. The expectation is a continuation of current policies which have been very beneficial for the country so far.
  • A partial privatisation program has been very positive. The government wants more transparency and accountability for the state-owned sector, and this is something we believe will lead to an overall re-rating.
  • The high number of blue plates for electric vehicles in Jakarta is a strong indication that the government’s push to electrification is gaining traction with the population, at least in the big cities. Fitch anticipates that 50,000 EVs will be sold in the country in 2023[3].
  • The young are coming back to work in Jakarta once their studies abroad are completed, and are enjoying the attractive opportunities and amenities available to them, including dozens of restaurants and trendy coffee shops.
  • Indonesia Investment Authority is the newly-created sovereign wealth fund tasked with facilitating FDI in the materials sector, infrastructure (physical and digital), logistics, green investing, and health care, amongst others.
  • It was clear that Indonesians are no different to consumers the world over, and their appetite for luxury is rapidly growing. But which luxury brand has a huge – and hugely impressive – store in Ashta District 8? Read our piece below to find out.

Overall, good economic performance and confidence in the current administration have translated into strong investment, and this was visible primarily in the developing infrastructure in Jakarta’s buzzing centre. President Joko Widodo (popularly known as ‘Jokowi’) has changed the country, and for the better.

We believe that Indonesia could be one of the largest success stories in EM. It has a diversified economy, with both domestic consumption and exports of downstream commodities products helping to generate a strong current account.

We hope that Indonesia continues on this positive path, and we left the country feeling optimistic. In our view, its current upward trajectory should translate into strong equity returns for investors over the long term.



[1] Statistics Indonesia, March 2023.


[3] Indonesia’s Annual EV Sales to More than Double to 5% in 2023.

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