Indonesia: A second term for Jokowi – ABN AMRO
|Arjen van Dijkhuizen, senior economist at ABN AMRO, points out that for the first time in history, Indonesia held presidential and parliamentary elections simultaneously on Wednesday 17 April and while official results will only be announced in May, unofficial results point to a clear victory for Jokowi.
Key Quotes
“On the basis of these official results, Jokowi claimed victory today, pointing at a 54.5% lead according to results of 12 polling agencies.”
“Assuming that Jokowi has indeed gained a second term, he has to start finding support in parliament and form a government (the 2nd term of his government would not start before October).”
“General expectation is that Jokowi will succeed in finding the necessary support and forming a government that will remain business friendly and aiming at further improvements of the investment climate and the infrastructure to support economic growth. Jokowi had already rolled out a USD 350bn infrastructure scheme in his first term, while he also intends to invest more in education.”
“With a more dovish Fed, financial markets have become more forthcoming to Indonesia. Moreover, we expect the significant cooling in global industry and trade seen in end 2018 to fade in the course of this year and Indonesia should profit from that. A more constructive response to the US-China trade conflict (with a ‘deal’ now expected in early May) is also helpful in this respect.”
“As the main policy rate has been held on hold (6%) since October 2018, the real policy rate (measured as the difference between the policy rate and actual inflation), has risen to 3.5% yoy in March. Against that background and with the Fed more dovish and the current account deficit back under control, we do see some room for Bank Indonesia to cut the policy rate one or two times this year.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.