The country’s economy, the largest in Southeast Asia, grew at an annual rate of 6.2 percent in the second quarter of this year, data released Thursday showed. That is an acceleration from 2009, when gross domestic product expanded 4.5 percent.
The stock market hit a record high last week and has been among the best-performing equities markets in Asia this year, rising more than 20 percent since Jan. 1. The country’s currency, the rupiah, has appreciated nearly 5 percent this year against the dollar, among the strongest showings in Asia besides that of the yen.
Foreign direct investment, which was held in check for years after the 1997 economic crisis in Asia, is also returning. The country had 33.3 trillion rupiah, or $3.7 billion, in foreign direct investment in the second quarter of this year, a 51 percent rise from a year earlier, the Investment Coordinating Board in Indonesia said last week. The country is on track to attract more foreign investment this year than it did in 2008, when it lured in $14.87 billion.
Such statistics have some here cautiously saying that the country, a Muslim-majority democracy and one of the world’s most populous countries, could soon merit the kind of attention that investors now lavish on China and India.
“Indonesia is one of the most interesting, most attractive destinations in the world,” said Lanang Trihardian, an analyst at Syailendra Capital, a fund management firm based in Jakarta. “Foreign investors have been flowing to Indonesia from maybe around mid-2009. We are seeing a lot of liquidity coming into Indonesia, and it is mostly going to capital markets, to bonds, to stocks.”"
source: seekingalpha.com