JPMorgan is positive on Indonesia despite surging Covid cases in the country

SINGAPORE — JPMorgan is positive on the outlook for Indonesia, though the country is nonetheless combating surging Covid infections, with the variety of cases crossing a million not too long ago.

The country’s younger inhabitants is a part of the cause behind that optimism, mentioned James Sullivan, who is head of Asia ex-Japan fairness analysis at the funding financial institution.

“Demographically Southeast Asia is very different from some of the developed countries that we tend to compare these countries to,” Sullivan advised CNBC’s “Squawk Box Asia” on Wednesday.

In 2015, the median age of Indonesia’s inhabitants was 28.5 years, in response to Statista.

“Because they’re so much younger, they tend to deal with the mortality side of this conversation significantly better than some of the older, developed economies,” he mentioned. “That’s a very important distinction as we think our way through this.”

As a consequence, lockdowns in such international locations “may not be as necessary” — in comparison with locations with a considerably older inhabitants which might be at larger danger from Covid-19, the analyst mentioned.

To illustrate his level, Sullivan used the instance of India, a country that is second solely to the U.S. in phrases of the variety of Covid infections globally, in response to information compiled by Johns Hopkins University.

“There were long conversations regarding the infection rates in India up until about August of last year,” he mentioned, including there have been “very dire predictions” about the pandemic’s influence on the Indian economic system.

Those fears surrounding India seem to have been unrealized, as the every day variety of Covid cases in the country has since come down considerably. Analysts have additionally mentioned its financial restoration has been stronger-than-expected.

Still, Indonesia has recorded the most variety of Covid-19 cases in Southeast Asia to this point, in accordance Hopkins’ information.

As of Wednesday, Indonesia recorded greater than 1.11 million coronavirus infections whereas no less than 30,770 folks have died from Covid-19, info from the country’s ministry of well being confirmed.

In addition to Indonesia’s comparatively younger inhabitants, JPMorgan is additionally seeing “positive efforts” to spur development in the total Indonesian economic system, Sullivan mentioned.

The authorities is pushing for an funding fund often called the Indonesia Investment Authority, with studies suggesting that Indonesian President Joko Widodo is seeking to elevate as a lot as $100 billion in funding.

Sullivan additionally added that there is been a “significant pickup” in manufacturing, significantly in the export sector. Furthermore, the JPMorgan analyst additionally cited the authorities’s efforts on the vaccine entrance as another excuse behind his positive outlook.

Indonesia kicked off a Covid-19 vaccination program in January that was described by Reuters as one in all the world’s largest campaigns. The country’s Finance Minister Sri Mulyani Indrawati not too long ago advised CNBC that it’s going to take no less than a yr for Indonesia to achieve “herd immunity” — which happens when a big proportion of the inhabitants turns into proof against the illness.

— CNBC’s Yen Nee Lee contributed to this report.