Indonesian economy to face indirect impacts from "Trump effect": observers

Indonesian economy was estimated to encounter indirect impacts from trade policy changes of the new U.S. administration under President Donald Trump, analysts here said.

Under his protectionism drive, Trump has pledged to radically change the nation's trade and economy policies following downturns experienced by the country that enormously imports commodities from other countries in the past several years.

Indonesian analysts said the Southeast Asian country would not be directly affected by the U.S. protectionism drive.

Indonesia, however, may feel the pinch from the indirect impacts related to difficulties experienced by countries directly affected by Trump's policy.

Analyst from University of Indonesia (UI) Destry Damayanti said the Indonesian government should come up with policies aimed at creating manufacturing sector that produces added-value products, so as to minimize the potential impact.

Commenting on Trump's recent move to quit the Trans-Pacific Partnership (TPP) trade deal, analyst from Indonesian Economic Intelligence think tank agency, Sunarsip said it would benefit Indonesia particularly on textile and garment exports to the United States.

"The United States may no longer prioritize imports from TPP signatory countries, paving the way for Indonesia to export more to that country," he said as quoted by a local media on Monday.

Indonesia Finance Minister Sri Mulyani said that Indonesia would continuously preserve its economy fundamentals to anticipate global economy impacts from "Trump effects."

"Trump's speech gives major pressures (to global community) as he prioritizes the United States interests above everything which may contradict global interests," she said on Monday.

The minister said Indonesia's domestic business are still trying to digest Trump's new policies with positive sentiments seen in national currency exchange rate against the U.S. dollar shortly after Trump's sworn in ceremony. Endit