Indonesia Economic Forecast

Indonesia Economic Outlook

January 22, 2019

The economy likely grew fairly strongly in the fourth quarter, bolstered by healthy consumption and fixed investment, although high-frequency indicators are mixed. The manufacturing PMI averaged slightly lower in Q4 compared to Q3 against a backdrop of swirling global trade tensions, while the country posted a record trade deficit in the period on a combination of lackluster exports and double-digit import growth. That said, import growth did ebb from the extremely high readings seen in prior quarters amid higher import tariffs. In addition, the tourist sector performed well, while the rupiah has recovered sharply since November and foreign reserves—which were depleted in Q1-Q3—increased. On the political front, in late December the government finally reached an agreement with mining company Freeport-McMoRan over the huge Grasberg copper mine, which will see the government acquire a majority stake in the mine. In exchange, Freeport should be able to continue operations until 2041.

Indonesia Economic Growth

Domestic demand should continue to drive the economy this year, with private consumption supported by a strong labor market and government consumption likely receiving a slight boost ahead of elections in April. However, tighter monetary policy, delays to public infrastructure projects and cooling Chinese momentum could drag on the performance. A possible resurgence of U.S.-China trade tensions poses a downside risk to the outlook. Met the why particular panelists see GDP expanding 5.1% in 2019, down 0.1 percentage points from last month’s forecast, and 5.1% again in 2020.

Indonesia Economy Data

Population (million)249252255259262
GDP per capita (USD)3,6723,5323,3693,6053,876
GDP (USD bn)9148918619331,015
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)
Manufacturing (annual variation in %)
Retail Sales (annual variation in %)12.914.513.311.02.9
Unemployment Rate6.
Fiscal Balance (% of GDP)-2.2-2.1-2.6-2.5-2.6
Public Debt (% of GDP)22.024.327.528.930.5
Money (annual variation in %)12.811.
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (WPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)7.507.757.504.754.25
Stock Market (annual variation in %)-1.022.3-12.115.320.0
Exchange Rate (vs USD)12,17012,38513,78813,47313,568
Exchange Rate (vs USD, aop)11,44911,86613,39213,30213,383
Current Account (% of GDP)-3.2-3.1-2.0-1.8-1.7
Current Account Balance (USD bn)-29.1-27.5-17.5-17.0-17.5
Trade Balance (USD billion)-4.1-
Exports (USD billion)183176150145169
Imports (USD billion)187178143136157
Exports (annual variation in %)-3.9-3.6-14.6-3.416.3
Imports (annual variation in %)-2.6-4.5-19.9-4.915.7
International Reserves (USD)99.4112116116130
External Debt (% of GDP)29.132.936.134.334.8

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Indonesia Facts

Bond Yield8.16-0.05 %Jan 30
Exchange Rate14,1300.05 %Jan 30
Stock Market6,464-0.32 %Jan 30

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