Indonesia Economic Outlook
June 21, 2022On the heels of a stable year-on-year GDP growth figure in Q1, the economy appears to be losing momentum in the second quarter. Domestically, private spending likely weakened: Retail sales slowed to an eight-month low in May amid a broad-based deterioration, while inflation rose to its highest level in over three years. Moreover, persistent supply constraints led the manufacturing PMI to moderate notably in May. Similarly, although the external sector likely benefitted from surging commodity prices, merchandise exports growth cooled remarkably in May. The slowdown came after the country implemented a controversial ban on palm oil exports in May, which it quickly reversed after three weeks amid widespread criticism. In response, President Joko Widodo dismissed the trade minister and reshuffled his cabinet on 15 June. Nonetheless, the policy reversal stands to rally exports ahead.
Indonesia Economic GrowthGDP should expand at a faster clip this year amid accelerating household spending and private investment. Less stringent Covid-19 restrictions and supportive monetary policy should fuel domestic demand. Moreover, the external sector stands to strengthen from higher commodity prices. That said, concerns over rising inflation and political uncertainty weigh on the outlook. FocusEconomics Consensus Forecast panelists expect GDP to expand 5.1% in 2022, which is unchanged from last month’s forecast. GDP is seen growing 5.0% in 2023.
Indonesia Economy Data
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|Bond Yield||7.10||-0.05 %||Dec 31|
|Exchange Rate||13,883||0.05 %||Jan 01|
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Indonesia Economic News
December 2, 2022
Inflation came in at 5.4% in November, down from October’s 5.7%.
December 1, 2022
The Manufacturing Purchasing Managers’ Index (PMI), produced by S&P Global, fell to 50.3 in November from 51.8 in the month prior.
November 22, 2022
Merchandise exports shot up 12.3% year-on-year in October (September: +20.2% year-on-year).
November 17, 2022
At its monetary policy meeting on 16–17 November, Bank Indonesia (BI) raised the seven-day reverse repo rate by 50 basis points from 4.75% to 5.25%, marking a continuation of its tightening cycle.
November 14, 2022
Merchandise exports soared 20.3% on an annual basis in September (August: +29.9% year-on-year).