Sluggish domestic consumption could pick up later in the year. But even if interest rates fall as expected, there will be only modest improvement in the property market. Capital investment should remain strong as work on the new airport and related projects continues. Still, expect plenty of pre-transition jitters. National elections are scheduled by April, and economic reform is a major issue.
Pundits predict slower growth as welfare spending rises to woo voters.
Investment is likely to slow in the first half of 1996 as foreign punters hold off business decisions until after the polls. Whoever takes power will have to accelerate reform by selling off or restructuring loss-making state enterprises and lowering import tariffs. Exports are expected to grow regardless, and foreign reserves should remain high. Everyday consumer stocks, such as cigarette-makers Gudang Garam and H.M. Sampoerna, should continue to get strong investor support. But export-oriented industries, like textiles and plywood, are showing declining results in the face of stronger competition.