Indonesia, Thailand election outcomes to be market neutral: DBS

A worker uses a magnifier to check ballot papers printed for Indonesia's upcoming presidential election.
A worker uses a magnifier to check ballot papers printed for Indonesia's upcoming presidential election.
FEBRUARY 15, 2019 - 4:21 PM

Indonesia, Thailand, and India are heading to the polls between March and July this year, but broad bipartisan support for recent policy moves suggests that continuity will reign regardless of outcome, said DBS Group Research economists Radhika Rao and Masyita Crystallin in a note on Feb 14.

On April 17, Indonesia will see simultaneous legislative and presidential elections for the first time, with incumbent president Joko Widodo leading the polls.

Said the economists: "We see elections as neutral for growth prospects, providing stability reigns."

Though it is too early to judge candidates’ plans before the official economic debate on April 13, the economists expect the current reform direction -- including infrastructure development, tax reforms, fuel subsidy reforms -- to continue regardless of the result.

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On March 24, Thailand will hold its first general election since the 2014 military coup, with three main parties in the fray.

The DBS economists "don’t anticipate any politics-led chaos in the run-up to the election", and see the formation of a stable government as beneficial for growth, which will also be driven by the continuation of large public sector investment projects.

In India, where the coalition led by the ruling Bharatiya Janata Party faces a strong challenge from the main opposition Congress party and regional parties, "a clear majority for any party/coalition will be the most favourable outcome, with any unstable arrangement with disparate partners to bode poorly for the investment climate, flows and the economy", said the economists. Nonetheless, there is also bipartisan support for recent welfare measures, they noted.