Indonesia aims to step up its economic growth
Indonesia's economic growth has lagged that of neighbours such as the Philippines and Vietnam. But soaring commodity prices could change that.

Indonesia “punches notably below its weight”, says Chris Anstey on Bloomberg. The country has the world’s fourth-biggest population and sits on “geographically pivotal” maritime trade routes between the Pacific and Indian oceans. Yet growth has lagged that of neighbours such as the Philippines and Vietnam over the last ten years, while per capita GDP “is little more than half that of Thailand’s”.
But soaring commodity prices may change the picture, says Barclays. Indonesia is running “large trade surpluses in palm oil, natural gas, coal, copper, rubber, iron and steel”. Higher export earnings have boosted the rupiah, which has been the best-performing Asian currency against the dollar over the past two years.
Attracting investment
Still, Indonesia will need to remedy its growth problem in order to build on this opportunity, says Shotaro Tani in Nikkei Asia. Growth has averaged 5% in recent years, less than the 6% level that the government thinks it needs to avoid the middle-income trap. President Joko Widodo has done a good job of addressing the country’s long-standing infrastructure problems, with 6,240km of roads and 15 new airports being rolled out during his first six years in office.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Now his government is planning to start restricting the export of unprocessed minerals, including nickel, tin, bauxite, gold and copper in order to encourage foreign companies to invest in more manufacturing capacity domestically. This strategy means the government is rolling out the red carpet for international investors.
GoTo growth
The MSCI Indonesia stock index has gained 13% so far this year, bucking a gloomy start to the year for emerging markets. Foreign investors are noticing: inflows of $0.7bn into the stockmarket this month have been large relative to its recent history, say analysts at DBS. Financial stocks make up more than half of the index: banks were hardest hit by the pandemic crisis, but now look well-placed to ride the “long runway” of an earnings recovery, says Societe Generale.
Other sectors, such as tech, point to the future. Local super-app GoTo listed this month, raising Rp15.8trn (£0.87bn), says TechCrunch. The listing, which made GoTo Indonesia’s fourth-biggest publicly traded company, is notable because the IPO market has been so flat globally this year. The shares enjoyed a post-flotation pop, but they have since dropped below the listing price.
The GoTo float was richly valued, say Tim Culpan and Andy Mukherjee on Bloomberg. But that speaks to excitement about the growing middle class and digital economy. Indonesia’s 273 million people are “mostly young, increasingly connected, and eagerly embracing the convenience economy”.
• SEE ALSO
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
HMRC confirms crypto ETN ISA rules
With crypto ETNs now technically available for UK retail investors, HMRC has confirmed they can be held in an ISA – but there’s a complication
-
Pensioners targeted in fine wine scams – the tactics to watch for
Wine has emerged as the latest lure in investment fraud, with pensioners being specifically targeted by scammers
-
Pierre-Édouard Stérin wants to make France great again
Conservative billionaire Pierre-Édouard Stérin is seeking to lead a political and spiritual renaissance across the Channel. The planning looks meticulous
-
Global investors have overlooked the top innovators in emerging markets
Opinion Carlos Hardenberg, portfolio manager, Mobius Investment Trust, highlights three emerging market stocks where he’d put his money
-
Pinewood Technologies: a drive for growth
Pinewood Technologies’ platform is one of the best in the business. Investors should buy in
-
'EV maker Faraday Future will crash'
Faraday Future Intelligent Electric is failing dismally to live up to its name, says Matthew Partridge
-
Investors should cheer the coming nuclear summer
The US and UK have agreed a groundbreaking deal on nuclear power, and the sector is seeing a surge in interest from around the world. Here's how you can profit
-
8 of the best houses for sale with follies
The best houses for sale with follies in the grounds – from a five-storey Victorian Gothic tower in Tonbridge, Kent, to a former mill in Oxfordshire with gardens that include a folly on an island in a lake
-
A tale of two Reits – why performance matters for valuation
AEW UK and Regional are two Reits that are valued very differently, despite a shared focus on properties outside London
-
Healthcare stocks look cheap, but tread carefully
Shares in healthcare companies could get a shot in the arm if uncertainty over policy in the US wanes, but are they worth the risk?