Indonesia Economic Forecast

Indonesia Economic Outlook

July 17, 2018

The latest batch of indicators suggests that the economy grew at a broadly stable pace in the second quarter. In June, the manufacturing PMI declined modestly from the almost two-year high recorded in May, while consumer confidence jumped to the best reading in the survey’s history. Improving consumer confidence, coupled with a faster expansion in retail sales in May, bodes well for private consumption growth in Q2. Although the trade balance posted a surplus in June, the external sector remains an economic weak spot. Monetary policy normalization in developed economies and prospects of a global trade war have shaken investors’ confidence and caused the currency to depreciate 4.1% in the second quarter. While the Central Bank intervened forcefully to stem the rupiah’s depreciation, the currency remains under pressure due to high ownership of government bonds by foreign investors, elevated prices for fuel products and a persistent current account deficit.

Indonesia Economic Growth

The domestic economy is expected to support healthy growth this year. However, prospects of a global trade war, a modest price outlook for Indonesian commodities, persistent turbulence in financial markets and higher crude oil prices could weigh on growth. Met the why particular panelists see GDP expanding 5.2% in 2018, which is down 0.1 percentage points from last month’s forecast. In 2019, the economy is seen growing 5.3%.

Indonesia Economy Data

20132014201520162017
Population (million)249252255259262
GDP per capita (USD)3,6723,5323,3693,6053,876
GDP (USD bn)9148918619331,015
Economic Growth (GDP, annual variation in %)5.65.04.95.05.1
Consumption (annual variation in %)5.45.15.05.04.9
Investment (annual variation in %)5.04.45.04.56.2
Manufacturing (annual variation in %)4.44.64.34.34.3
Retail Sales (annual variation in %)12.914.513.311.02.9
Unemployment Rate6.25.96.25.65.5
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 %)12.811.99.011.08.3
Inflation Rate (CPI, annual variation in %, eop)8.18.43.43.03.6
Inflation Rate (CPI, annual variation in %)6.46.46.43.53.8
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)-4.1-2.27.79.511.8
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

ValueChangeDate
Bond Yield7.56-0.05 %Jul 17
Exchange Rate14,3700.05 %Jul 17
Stock Market5,862-0.32 %Jul 17

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