Over the past few months, Indonesia has been buffeted by market volatility, spurred in part by concerns that the U.S. Federal Reserve's plans to begin tapering its asset purchases would make it difficult for the country to finance its current account deficit – 4.4 percent of GDP as of the second quarter.
Shares are down more than 14 percent from their May peaks and its currency has lost nearly 18 percent of its value against the dollar year-to-date.
"It was a transitory state of the world in the middle of the year when there was almost a panic when current account deficits were (viewed as) bad. But the ordinary state of the world is that current account deficits are neither bad nor good. If they're produced because a country is investing a lot, then they're good and that's the story in Indonesia," Condon said.
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A current account deficit "means the investment rate has gone up; there's more investment opportunities onshore than Indonesia can finance through their own savings. That's a good thing," he said.
He expects the Indonesian assets sold off will retrace their losses in the fourth quarter. He likes rupiah-denominated bonds and expects Jakarta shares to be one of the top performing markets in the quarter. He expects the rupiah to fall back below 10,000 to the dollar in 2014. It is currently around 11,300.
But Condon's view may be an outlier.
"I don't think over the next five years [Indonesia will] make significant strides" on structural issues, said Fred Gibson, an economist at Moody's Analytics. He forecasts GDP growth of 5.4 percent this year, which he see rising to 5.5-5.9 percent in 2014, before hitting a peak of 6.3 percent in 2015 and stabilizing around 6.2 percent thereafter.