Indonesian economy The country may be among the top six of the world’s largest economies by 2030, Standard Chartered said in an October 2011 report. The bank defines a super-cycle as a period of historically high global growth lasting a generation or more, driven in part by increasing trade, high rates of investment, urbanisation and technological innovation.
Indonesia isn’t “a typical Asian manufacturing exporter driven by its growing workforce or a commodity exporter driven by its rich endowments of natural resources,” McKinsey said. “The reality is that, to a large extent, it is domestic consumption rather than exports, and services rather than manufacturing or resources, which are propelling growth.”
Lowest volatility Investors are now demanding lower premiums to hold Indonesian debt. The country will offer its lowest-ever coupon for dollar-denominated bonds when it sells global sukuk as soon as next month, according to PT Manulife Asset Management Indonesia and PT BNI Asset Management. The cost to protect Indonesian bonds from default dropped to the least since May 2011 on Sept. 14, and it’s now more expensive to insure Israeli and South African debt, both ranked at least three levels higher than Indonesia by Moody’s.“Indonesia is in the throes of a rapid transformation,” McKinsey said. “The Indonesian economy is larger, more stable, and more advanced than many companies and investors around the world realise.”
Indonesia is currently the world’s 16th-largest economy, with gross domestic product of about $846 billion last year, according to IMF data. That may rise to $1.8 trillion in 2017, compared with Germany’s $3.9 trillion economy and U.K. GDP of $3.2 trillion in the same period, IMF data shows. The McKinsey report didn’t give GDP projections for 2030.
Commodity exporter Only China, the US, India, Japan, Brazil and Russia will be bigger than Indonesia by 2030, McKinsey said.Singapore: Indonesia may surpass Germany and the UK by 2030 to be the world’s seventh-largest economy, generating $1.8 trillion in annual sales for agriculture, consumer and energy companies by that year, McKinsey & Co. said.President Susilo Bambang Yudhoyono is increasing spending on roads, seaports and airports as he woos investment to spur Southeast Asia’s largest economy. More than a decade after the Asian financial crisis forced the nation to seek an International Monetary Fund bailout, Fitch Ratings and Moody’s Investors Service have raised Indonesia to investment grade and the country’s growth is among the fastest in the Group of 20.
“Indonesia is in the throes of a rapid transformation,” McKinsey said. “The Indonesian economy is larger, more stable, and more advanced than many companies and investors around the world realise.”