Indonesia Economic Forecast

Indonesia Economic Outlook

April 24, 2018

Economic activity continued to expand at a healthy pace in the first quarter, according to available data. The domestic economy is firming, as suggested by soaring imports. This is likely being supported by the ramp-up in infrastructure spending pursued by the government, mainly through the expansion of the balance sheets of state-owned enterprises (SOEs). Bank loans expanded robustly in the first quarter, a further sign of strengthening domestic demand. In addition, improvements in the manufacturing sector were registered by the PMI in February and March. On 11 April, Moody’s upgraded the country’s rating to Baa2 with stable outlook, citing the government’s prudent fiscal stance and the Central Bank’s focus on controlling inflation.

Indonesia Economic Growth

Growth is expected to accelerate somewhat this year, mainly supported by stronger domestic demand. Favorable financing conditions, rising inflows of FDI and higher commodity prices should spur private investment, while public investment will be scaled up through higher public infrastructure spending. Moreover, public finances will be kept in check, although the rising indebtment level of SOEs may push the government to spend public resources to ensure their financial viability. Cooling demand from China and rising global interest rates pose the main downside risks to the outlook. Met the why particular panelists see GDP expanding 5.3% in 2018, unchanged from last month’s forecast. In 2019, the economy is seen growing 5.4%.

Indonesia Economy Data

20132014201520162017
Population (million)249252255259262
GDP per capita (USD)3,6723,5323,3713,605-  
GDP (USD bn)914891861933-  
Economic Growth (GDP, annual variation in %)5.65.04.95.0-  
Consumption (annual variation in %)5.45.15.05.0-  
Investment (annual variation in %)5.04.45.04.5-  
Manufacturing (annual variation in %)4.44.64.84.0-  
Retail Sales (annual variation in %)12.914.513.311.0-  
Unemployment Rate6.25.96.25.6-  
Fiscal Balance (% of GDP)-2.2-2.1-2.6-2.5-  
Public Debt (% of GDP)22.024.327.528.9-  
Money (annual variation in %)12.811.99.011.0-  
Inflation Rate (CPI, annual variation in %, eop)8.18.43.43.0-  
Inflation Rate (CPI, annual variation in %)6.46.46.43.5-  
Inflation (WPI, annual variation in %)6.09.3-  -  -  
Policy Interest Rate (%)7.507.757.504.75-  
Stock Market (annual variation in %)-1.022.3-12.115.3-  
Exchange Rate (vs USD)12,17012,38513,78813,473-  
Exchange Rate (vs USD, aop)11,44911,86613,39213,302-  
Current Account (% of GDP)-3.2-3.1-2.0-1.8-  
Current Account Balance (USD bn)-29.1-27.5-17.5-16.9-  
Trade Balance (USD billion)-4.1-2.27.79.5-  
Exports (USD billion)183176150145-  
Imports (USD billion)187178143136-  
Exports (annual variation in %)-3.9-3.6-14.6-3.4-  
Imports (annual variation in %)-2.6-4.5-19.9-4.9-  
International Reserves (USD)99.4112116116-  
External Debt (% of GDP)29.132.936.134.0-  

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Indonesia Facts

ValueChangeDate
Bond Yield7.14-0.05 %May 16
Exchange Rate14,0930.05 %May 16
Stock Market5,841-0.32 %May 16

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