Countries In-Depth

Indonesia: Undergoing A Regime Change?

26 Mar 2025

by Rajeeb Pramanik, Senior EM Strategist Arthur Budaghyan, Chief EM/China Strategist

There is an ongoing regime shift in Indonesia: SOEs will be used to drive economic growth. Bank loans will accelerate, but their profit margins will shrink. Despite higher nominal growth, Indonesian equity prices in US dollar terms will not see a sustainable bull market. Downside risks to currency and upside risks to domestic bond yields have also increased.

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