ADB Slashes Indonesia's Growth Estimates

Asian Development Bank (ADB) cut its forecast for Indonesia's economic growth this year from 5.2 percent to 5.1 percent. In their latest report, ADB sees the Indonesian economy as being particularly vulnerable to the global economic slowdown. Indonesia's economy has slowed this year on falling export due to declining demand, which led to decreased commodity prices. It is reasonable since commodities like coal and crude palm oil (CPO) are Indonesia's main exports.

Moreover, foreign investments had stagnated due to competition from other Southeast Asian countries. As proof, Chinese companies prefer to relocating their factories to Vietnam, Thailand, and Malaysia. ADB sees the foreign investment issue lies in somewhat complicated licensing compared to other Southeast Asian countries. It might get worse as the US-China trade war still poses risks to trade and investment in Asian countries, including Indonesia.