Economists say that the victory of Prabowo Subianto-Gibran Rakabuming Raka in one round of the 2024 Presidential Election has provided certainty to investors. As a result, investment flows from abroad are expected to return to Indonesia soon.
Staff for Economics, Industry and Global Markets from Bank Maybank Indonesia, Myrdal Gunarto, said that certainty regarding who will be elected in the presidential election has provided certainty to investors. He predicts that the flow of foreign capital in the form of Foreign Direct Investment will come soon.
“In terms of FDI, it seems that with this certainty, global-based companies really have a need to come immediately,” he said, quoted Friday, (22/3/2024).
Myrdal said the results of the legislative election contributed to the market’s positive response to Prabowo-Gibran’s victory. The results of the legislative elections, he said, show that the party supporting candidate number 2 will become the majority in parliament. “This causes euphoria from global investors,” he said.
Myrdal believes that with this sentiment, combined with Indonesia’s solid economic conditions and controlled socio-political conditions, global investors will soon enter Indonesia. However, the return of foreign funds to the Indonesian portfolio market is still very much influenced by the future attitude of the United States central bank, The Fed.
He predicts that the sectors that will be targeted by Foreign Direct Investment will be the sectors that are part of Prabowo-Gibran’s work program. These include the mining, agriculture and communications technology sectors, as well as green energy.
“The hope is that the election results that have been officially announced, and Prabowo-Gibran will support the continuity of the Jokowi government,” he said.
Meanwhile, Bank Mandiri Chief Economist Andry Asmoro said that his party had not calculated the detailed impact of the election results on the flow of foreign capital to Indonesia. However, according to him, the Fed’s decision will greatly determine the entry of foreign capital into the Indonesian market.
“We haven’t calculated the inflow projections in detail, but it should be that outside of the election there is a cut in the Fed’s benchmark interest rate, this will encourage inflows to emerging markets, including Indonesia,” he said.
March 22, 2024, CNBC Indonesia
(https://www.cnbcindonesia.com/news/20240322094214-4-524368/prabowo-gibran-pemenang-pilpres-investasi-ri-diprediksi-moncer-lagi)