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Investors optimistic about Indonesia`s future economic condition: Analyst

Jakarta (ANTARA News) – Investors are optimistic about Indonesias future economic condition, which is marked by the strengthening of its Composite Stock Price Index at the closing on Tuesday, a financial service firms research analyst FXTM Lukman Otunuga stated.

“Stock markets in Indonesia are likely to remain buoyed as optimism for the country raises the appetite in the capital market,” Otunuga noted in a written statement here on Wednesday.

Otunuga said the main risk for Indonesia this week is the predicted decision of Bank Indonesia (BI/the central bank) to not change its interest rate in June.

The financial analyst believed that if economic conditions in Indonesia continue to strengthen and core economic data follows a positive trend, then BI can increase its interest rate before the end of the year.

Otunuga had earlier also stated that the World Bank is optimistic about Indonesias economic condition, hence various stakeholders also need to maintain the momentum.

“Sentiment towards Indonesias economy is improving, as reports show that the World Bank remains optimistic about the countrys situation. The World Banks latest growth projections show that Indonesias economy remains strong in 2017 and is among the most attractive emerging markets,” he remarked.

According to Otunuga, several aspects that have led to the optimistic sentiment include loan growth that touches about 10 percent per year and inflation that has begun to stabilize.

With such positive economic data, he said, the overall outlook for the economic conditions is bright.

“If Indonesias economic data continues to follow a positive trend, then expectations of a rate hike by BI before the end of this year will increase to support growth,” he noted.

The earlier visit of the World Bank survey team to the Jakarta Capital Investment Service and Integrated Services Office (DPM-PTSP) indicated that the investment climate and the ease of doing business in Indonesia were positive.

Head of DPM-PTSP Edy Junaedi Harahap, in a release in Jakarta on Wednesday (June 17), viewed the visit as a positive signal to the ongoing changes in Indonesia.

“This visit shows the banks attention to the positive changes in Indonesia that has successfully implemented reforms on seven indicators in the Ease of Doing Business Index rating,” Harahap stated.

Harahap noted that the ease of doing business index is one of the benchmarks of the countrys competitiveness assessed by the World Bank on 10 regulatory indicators that have an influence on the ease of business. (*)