Indonesia Economic Forecast

Indonesia Economic Outlook

February 20, 2018

Growth ended 2017 on a solid note, accelerating for the second consecutive period in the final quarter of the year. Booming investment and greater public sector spending drove the uptick, while soaring imports eroded the external sector’s contribution. A pipeline of infrastructure projects caused investment in the construction sector to grow at a particularly strong pace; overall, growth was more broad-based in the quarter. Incoming data for the first quarter of 2018 revealed that economic dynamics are likely to be unchanged. The manufacturing PMI edged up in January, while imports soared in the same month—suggesting continued growth in investment. However, the trade balance recorded its third deficit in the past two years. Meanwhile, the rupiah fell to the lowest level in nearly two years on 8 February, amid heightened volatility in global stock markets.

Indonesia Economic Growth

Strong investment growth and higher government spending due to upcoming regional and general elections should fuel higher growth this year. That said, faster and larger increases in U.S. interest rates are a risk to the economy’s prospects, as they could lead to capital outflows and put pressure on the rupiah. Met the why particular panelists see GDP expanding 5.3% in 2018, which is unchanged from last month’s forecast. In 2019, the economy is seen growing 5.4%.

Indonesia Economy Data

20122013201420152016
Population (million)245249252255259
GDP per capita (USD)3,7503,6723,5323,3713,605
GDP (USD bn)920914891861933
Economic Growth (GDP, annual variation in %)6.05.65.04.95.0
Consumption (annual variation in %)5.55.45.15.05.0
Investment (annual variation in %)9.15.04.45.04.5
Manufacturing (annual variation in %)5.64.44.64.84.0
Retail Sales (annual variation in %)14.512.914.513.311.0
Unemployment Rate6.16.25.96.25.6
Fiscal Balance (% of GDP)-1.8-2.2-2.1-2.6-2.5
Public Debt (% of GDP)21.422.024.327.528.9
Money (annual variation in %)15.012.811.99.011.0
Inflation Rate (CPI, annual variation in %, eop)3.78.18.43.43.0
Inflation Rate (CPI, annual variation in %)4.06.46.46.43.5
Inflation (WPI, annual variation in %)5.16.09.3-  -  
Policy Interest Rate (%)5.757.507.757.504.75
Stock Market (annual variation in %)12.9-1.022.3-12.115.3
Exchange Rate (vs USD)9,63812,17012,38513,78813,473
Exchange Rate (vs USD, aop)9,36211,44911,86613,39213,302
Current Account (% of GDP)-2.7-3.2-3.1-2.0-1.8
Current Account Balance (USD bn)-24.4-29.1-27.5-17.5-16.9
Trade Balance (USD billion)-1.7-4.1-2.27.79.5
Exports (USD billion)190183176150145
Imports (USD billion)192187178143136
Exports (annual variation in %)-6.6-3.9-3.6-14.6-3.4
Imports (annual variation in %)8.0-2.6-4.5-19.9-4.9
International Reserves (USD)11399.4112116116
External Debt (% of GDP)27.429.132.936.134.0

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Indonesia Facts

ValueChangeDate
Bond Yield6.47-0.05 %Feb 20
Exchange Rate13,6130.05 %Feb 20
Stock Market6,663-0.32 %Feb 20

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