Indonesia Economic Forecast

Indonesia Economic Outlook

November 13, 2018

Economic growth dipped slightly in the third quarter but stayed solid, supported by domestic demand. Private consumption expanded robustly, likely supported by mild inflation, a healthy labor market and the Asian Games in August–September, while government consumption and fixed investment also grew at a fast pace. However, the external sector contributed negatively to growth. Looking at Q4, growth should remain robust thanks to ongoing strong private consumption. That said, the manufacturing PMI declined in October, while the recent tsunami and airplane crash could dampen tourist arrivals. At the end of October, parliament approved the 2019 budget—which had originally been presented in August—without major changes. GDP and inflation assumptions were unchanged, and the fiscal deficit target remained at 1.8% of GDP. However, estimates for expenditure and revenue, and the IDR/USD exchange rate, were raised slightly.

Indonesia Economic Growth

Domestic demand should continue to underpin the economy, with private consumption supported by a strong labor market and government consumption likely receiving a boost ahead of elections in April 2019. However, tighter monetary policy, delays to public investment projects, cooling Chinese demand and a possible resurgence of U.S.-China trade tensions pose downside risks. Met the why particular panelists see GDP expanding 5.2% in 2019, down 0.1 percentage points from last month’s forecast, and 5.2% again in 2020.

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 Yield8.11-0.05 %Dec 11
Exchange Rate14,5550.05 %Dec 11
Stock Market6,111-0.32 %Dec 11

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