With Indonesia's growth numbers in the spotlight this week, doubts are growing over President Joko Widodo's ability to stimulate the economy as the country faces the prospect of a severe slowdown.
Investors are bracing for a weak first-quarter gross domestic product (GDP) report on Tuesday, which could show growth falling below 5 percent, Daiwa Capital Markets estimated, worse than 2014's 5 percent increase, a five-year low.
"On-the-ground channel checks suggest severe growth deceleration with various sectors experiencing declines of 30-90 percent on year. From brick sellers to diamond shops, the adverse impact of the slowdown appears to be widespread," Daiwa said in a report last week. An economic rebound isn't likely until the third-quarter, judging by seven straight months of shrinking manufacturing activity, it said.
"Indonesia is in dire need of some growth," added Credit Suisse said in a recent note. "The question is, what can the government do to stimulate growth? And, just how effective such a policy will be?"
It's a concern reflected in the stock market, with the Jakarta Composite dropping more than 6 percent last week as poor results from index heavyweights sparked growth concerns. Stocks on Monday, however, managed to rebounded more than 1 percent.
With net foreign outflows of over $1 billion since mid-March and year-to-date losses of nearly 3 percent, the benchmark is now one of the world's worst-performing indexes.