By Chris Shaw (Tokyo)<\/p>\n
ABN Amro has returned from a fact-finding mission in Indonesia with the conclusion any upside surprise in terms of economic performance is unlikely in the short-term.<\/p>\n
Its view is based on a combination of factors, the two most important being a slowdown in government spending thanks to an anti-corruption drive and a slowing economy overall, where a fall in consumer spending is beginning to bite.<\/p>\n
The broker suggests this is exactly the opposite outcome to what the country needs, as it suggests government spending should be increasing in an attempt to bring much-needed economic reforms to the country particularly in the areas of investment, labour and tax laws.<\/p>\n
The tax changes in particular are important, as if changes were made to eliminate tax liabilities arising from asset revaluations it would have a significant positive benefit in terms of strengthening corporate balance sheets. This in turn would improve the flow of credit and provide greater depth to the bond market.<\/p>\n
But having an idea of what is required and actually making the necessary changes are two different things, the broker suggesting the current anti-corruption drive is hampering the ability of the government to make changes. As a result, it suggests investors should prepare for a period of underperformance until such new laws are put into place.<\/p>\n
The broker is forecasting GDP growth of 4.5% for 2006.<\/p>\n","protected":false},"excerpt":{"rendered":"
Indonesia needs tax reform, but the government is focused on attacking corruption instead. Don’t expect any positive surprises, ABN Amro says.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[58],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/51639"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=51639"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/51639\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=51639"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=51639"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=51639"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}