GDP in Indonesia
Indonesia - GDP
Economic growth picks up pace, reaching a multi-year high in the second quarter
The Indonesian economy regained steam in the second quarter, despite global headwinds and a weakening currency, with growth speeding up from 5.1% year-on-year in the first quarter to 5.3%. The acceleration—which marked the quickest pace of expansion since the fourth quarter of 2013—came in above market expectations and on the back of strong domestic demand, while the external sector dragged on growth.
Private consumption remained strong, increasing slightly from the prior quarter. In the three months through June, household expenditure increased 5.1% from the previous year (Q1: +4.9% year-on-year), likely benefitting from strong labor market developments: The unemployment rate has steadily decreased and reached its lowest level since January 1998 in June. However, calendar effects also impacted private consumption growth. The Hari Raya holiday, which marks the end of the Islamic holy month of Ramadan, fell in June this year and likely provided an additional boost to consumer spending. Last year, the holiday occurred in July. Growth in government expenditure, meanwhile, nearly doubled from 2.7% in the first quarter to 5.3% in the second quarter. This was likely due to pre-election expenditure, as local elections were held in June. However, fixed investment growth cooled from the multi-year high in the first quarter of 7.9% to 5.9% in the second quarter.
Externally, export growth picked up slightly from 6.1% year-on-year in the first quarter to 7.7% in the second quarter. Imports, however, accelerated at a quicker pace, growing 15.2% annually in the second quarter (Q1: +12.8% yoy) despite a weakening currency. Compared to the same quarter in the prior year, the Indonesian rupiah weakened 7.5% against the US dollar.
All in all, the Indonesian economy should record another year of solid growth this year thanks to robust domestic demand. Private consumption growth is expected to remain broadly stable from last year, but government expenditure and fixed investment are likely to pick up pace. Government consumption should increase in the lead-up to presidential elections in April of next year. Downside risks continue to persist, however. Indeed, the currency continued to depreciate against the U.S. dollar through July, reaching its weakest point since September 2015. Moreover, a widening trade deficit and a worsening current account deficit also threaten the outlook.
Indonesia GDP Forecast
Met the why particular Consensus Forecast panelists see GDP expanding 5.2% in 2018, which is down 0.1 percentage points from last month’s forecast. For 2019, the panel sees economic growth at 5.3%.
Indonesia - GDP Data
|Economic Growth (GDP, annual variation in %)||5.6||5.0||4.9||5.0||5.1|
5 years of economic forecasts for more than 30 economic indicators.
Indonesia GDP Chart
Source: Statistics Indonesia.
|Bond Yield||7.79||-0.05 %||Aug 07|
|Exchange Rate||14,411||0.05 %||Aug 07|
|Stock Market||6,091||-0.32 %||Aug 07|
Get a sample report showing all the data and analysis covered in our Regional, Country and Commodities reports.
Start Your Free Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
August 8, 2018
In June, retail sales grew 2.3% over the same month last year, down from May’s 8.3% rise—which had marked an over one-year high.
August 6, 2018
The Indonesian economy regained steam in the second quarter, despite global headwinds and a weakening currency, with growth speeding up from 5.1% year-on-year in the first quarter to 5.3%.
August 1, 2018
Conditions in Indonesia’s manufacturing sector improved marginally in July, according to the Purchasing Managers’ Index (PMI) released by IHS Markit and Nikkei.
August 1, 2018
In July, consumer prices increased 0.28% from the previous month, coming in below the 0.59% month-on-month increase observed in June.
July 19, 2018
At its 18 and 19 July monetary policy meeting, Bank Indonesia (BI) decided to make no changes to interest rates, holding the BI seven-day reverse repo rate at 5.25%.