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Ratings agency Fitch Ratings’ annual Jakarta credit briefing showed that the majority of respondents it surveyed had a positive and upbeat view of the economy and business environment in 2014, even with elections due later in the year.
In the survey, a series of eleven questions about the Indonesian economy, reform, and developments over the next five years was put to the participants.
Two-thirds of respondents rejected the labeling of Indonesia as one of the "fragile five" economies.
This concurred with views expressed by Ashley Taylor, a World Bank economist, in his presentation, and remarks in the keynote speeches by Deputy Finance Minister Bambang Brodjonegoro, Bank Indonesia (BI) Governor Agus Martowardojo, and Financial Services Authority (OJK) deputy commissioner Mulya Siregar.
The poll revealed optimism about the trajectory of the currency following its overall depreciation in 2013, with 50 percent of the participants believing that the currency would stabilize and 42 percent confident that it would strengthen from its current level.
As for structural reforms, even though nearly 60 percent of participants felt that recent regulatory developments would negatively impact investment, a hefty 82 percent of them felt that Indonesia would continue to make significant progress in reforms over the next five years.
About two-thirds of participants were confident that Indonesia would accelerate infrastructure development over the next five years. Thirty five percent of them believed that corruption and transparency issues would continue to be addressed at the same rate while 52 percent were confident that the issues could be addressed at a faster rate over the next five years.
There was more uncertainty about GDP growth. Sixty percent felt that GDP would either grow faster (37 percent) than in 2013 or remain the same (23 percent), while 40 percent felt that GDP growth would continue to slow.
In the banking sector, although nearly 60 percent of the participants felt that complying with proposed Basel III capital regulations would not prove too onerous for Indonesian banks, a similar ratio (58 percent) felt that Indonesian banks would not outperform their 2013 results in 2014. (ebf)
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