SINGAPORE – JPMorgan is positive about the outlook for Indonesia, even though the country is still struggling to cope with Covid’s disease, with the number of cases recently crossing over a million.
The country’s young population is part of the reason behind that hope, said James Sullivan, who heads the Asian bank’s study of Asia’s equality outside Japan.
“The demographics of Southeast Asia are very different from some of the developed countries with which we tend to compare these countries,” Sullivan told CNBC’s “Squawk Box Asia” on Wednesday.
In 2015, the median age of Indonesia’s population was 28.5 years, according to Statista.
“Because they are much younger, they tend to deal with the mortality side of this conversation much better than some developed economies,” he said. “That’s a very important difference because we’re thinking our way through this.”
As a result, locking locks in such countries may not be “as necessary” – compared to places with much older populations that are at higher risk from Covid-19, the analyst said.
India for example
To illustrate his point, Sullivan used the example of India, a country that is second only to the U.S. in terms of the number of Covid diseases worldwide, according to data compiled by Johns Hopkins University.
“There were lengthy talks on infection rates in India up until around August last year,” he said, adding that there was a “terrible prediction” about the impact of the pandemic on the economy. of India.
These fears around India do not seem to have materialized, as the daily number of Covid cases in the country has dropped dramatically. Analysts have also said its economic recovery has been stronger than expected.
However, Indonesia has recorded the highest number of Covid-19 cases in Southeast Asia to date, according to Hopkins data.
On Wednesday, Indonesia registered more than 1.11 million coronavirus diseases while at least 30,770 people died from Covid-19, information from the country’s health ministry showed.
Other factors
In addition to Indonesia’s young population, JPMorgan also sees “progressive efforts” to stimulate growth in Indonesia’s overall economy, Sullivan said.
The government is pushing for an investment fund called the Indonesian Investment Authority, with reports revealing that Indonesian President Joko Widodo is looking to raise as much as $ 100 billion in funding.
Sullivan also said there had been a “huge boost” in manufacturing, particularly in the export sector. In addition, analyst JPMorgan also cited the government’s efforts on the vaccine front as another reason behind its positive outlook.
Indonesia launched a Covid-19 vaccination program in January that was described by Reuters as one of the world’s largest enterprises. Sri Mulyani Indrawati’s Finance Minister recently told CNBC that it will take Indonesia at least a year to reach “herd immunity” – which happens when a large proportion of the population becomes immune to the disease.
– Yen Nee Lee from CNBC contributed to this report.