Southeast Asian investors step away from Indonesia, toward Philippines and Thailand
What was once hailed as the most triumphant economy in the region, Indonesia has recently lost favor among investors following devalued currency and sluggish stocks and bonds.
As the economy in Indonesia begins to slow investors become increasingly concerned among questionable government and bank practices throughout the region.
While Indonesian stocks have risen 2% in the last 6 months, it doesn’t appear to appeal to investors nearly as much as Thailand’s 12% and Philippines 13% despite the fact that Indonesia’s economy has remains one of the strongest in the region.
So far, as much as $2bn have been pulled from the Indonesian market and only helped to bring the Indonesian Rupiah down in value.
A huge reason for the interest in other Southeast Asian countries, particularly in the example of the Philippines is due to President Benigno Aquino and his campaign to battle corruption. Meanwhile, Thailand’s economy is making great headway following last year’s devastating floods.
This is not to say that Indonesia’s economy is failing miserably. The Archipelago nation has enjoyed 6.5% growth over the past 18 months, with another 6% of expansion estimated within the year.
Indonesia’s demand for imported products is steadily on the rise and as products become in higher and higher demand, inflation may not be far from following.
This shouldn’t paint a perfect picture of Thailand and the Philippine’s by contrast, the two nations have plenty of problems of their own at the moment. Malaysia is another nation being followed closely by investors, but the outcome of the country’s upcoming elections will weigh heavily on investors.