AmCham’s Services Committee continues to have a positive outlook on the Indonesian economy, following the improving Covid-19 situation in Indonesia. Held on May 25, committee Chair Peter Meyer kicked off the “breakfast without breakfast” meeting with a virtual greeting to participants.
As predicted, business activities are getting back to normal, with mobility increasing and in-person meetings taking place once again, following the implementation PPKM Level 1 in Jakarta. Indonesia also saw impressive GDP growth in Q1 of 5.01 percent, following growing exports, imports, and investments. The meeting also discussed Tesla’s plan to explore building a battery factory in Indonesia, which further intensifies the positive mood for foreign direct investment in Indonesia. However, the impact of the Russia-Ukraine war on supply chains is here to stay, resulting in inflation and currency instability.
From the insurance side, the Financial Services Authority (OJK) insurance industry report of 2021 showed low insurance market penetration of only 0.45 percent for general business – the lowest since 2017 – and 3.06 percent for life insurance. New taxation policies were introduced by the government in the field of crypto assets and fintech, anticipating the increase of digital adoption by society. Investments in data centers and data security markets are also increasing.
The overall “temperature take” from participants maintained a very positive number, with 95 percent holding a positive outlook and only 5 percent having a negative outlook.