Report Published: "Indonesia Freight Transport Report Q3 2014"

Nationalism And Elections Worry Investors

We have reduced our GDP growth forecast for Indonesia this year, cutting it back to 5.1%, down from the 5.4% we were predicting in our previous quarterly shipping report. The main reason is growing political risk ahead of the presidential elections due in July 2014, coupled with increased economic nationalism from the outgoing government. Taken together these things are persuading investors to wait things out. Economic growth in the first quarter had already slowed to 5.1%. The ban on mineral ore exports (introduced to try and force mining companies to do more refining and processing within Indonesia) has had a negative effect, particularly as it has coincided with slowing Chinese demand for Indonesian coal. Other measures (such as new restrictions on foreign participation in the oil and gas sector) have also concerned investors. We expect slowing investment to be the main drag on growth this year. On the plus side, however we believe that presidential front runner Joko Widodo (Jokowi), the former mayor of Jakarta, who is favourite to win the contest, is reform minded and is prepared to strike an astute balance between the needs of foreign investors and domestic political constituencies. Although his detailed policies have yet to be spelled out, we think he could boost the infrastructure, mining, and oil and gas sectors, although admittedly he may face an uphill task in coalescing political support for his plans, given the expected fragmentary nature of the new parliament.

Full Report Details at
- http://www.fastmr.com/prod/852037_indonesia_freight_transport_report_q3_2014.aspx?afid=301

Our freight transport forecast for 2014 shows a slower pace of growth, as the economy decelerates. This slowdown will be partially offset by something of a recovery in foreign trade that we expect during the course of the year. On the medium to longer term we continue to think that the key to sustainable growth is investment in port infrastructure, including road and rail links in the hinterland areas. We are encouraged to see some evidence of progress...

The Indonesia Freight Transport Report has been researched at source, and features latest-available data covering commercial transport and logistics by road, rail, air and water; industry forecasts, company rankings covering leading national and multinational operators; and analysis of latest industry trends, opportunities, projects and regulatory changes.

Business Monitor International (BMI)'s Indonesia Freight Transport Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Indonesian freight transport and logistics industry.

Key Benefits

* Benchmark BMI's independent freight transport industry forecasts on Indonesia to test other views - a key input for successful budgetary and planning in the strategic freight transport market.

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