A report paints a broadly positive picture for growth in the vast Southeast Asian nation.

Indonesia’s population of high net worth individuals is expected to expand by 26 per cent from 2018, rising to 1.6 million persons by 2022, underscoring why wealth managers regard the Asian nation as an important growth opportunity.

From 2014 to 2018 there was an average annual growth rate of 7.3 per cent, rising to 1.3 per cent, GlobalData, the analytics and data firm, said in a report called Indonesia Wealth Management: Opportunities and Risks to 2022. 

“The growth will be driven by infrastructure expansion, rising working population and the government’s regulatory reforms aimed at boosting investments,” Shivani Gupta, wealth analyst at GlobalData, said.

While the Indonesian affluent market remains small, it is set for continuous strong growth. In 2018, the affluent population (comprising high net worth and mass affluent individuals) accounted for only 0.71 per cent of adults in the country. However, the segment held 95.4 per cent of Indonesia’s total onshore liquid assets in 2018, with mass affluent people alone holding more than half.

Indonesian HNW investors hold the vast majority (89.9 per cent) of their investments in liquid assets such as equities, mutual funds, deposits, and bonds. However, wealth managers must remain aware of the slowly increasing investments in illiquid assets, with their proportion expected to rise over the coming years.

The country’s retail savings and investments market has been growing at a constant pace, and this trend is expected to continue over the next five years. Overall, the value of the market tripled from $108 billion in 2008 to $326 billion in 2018 and is expected to cross the $400 billion mark in 2022.