Indonesia, the world’s fifth largest country by population, is challenged with slowing growth, a weakening currency and widening budget and current account deficits. The Southeast Asian nation also needs to find a way to finance infrastructure upgrades.
Markets have surged this year on hopes that Widodo, a relative outsider, might be able to turn things around. Stocks have soared 20% since January, and the rupiah has gained 5.2%.
Widodo will have his work cut out for him. “The constraints of coalition politics, as well as a lack of experience on the national stage, could thwart his efforts to get the slowing economy back on track,” said Gareth Leather of Capital Economics.