Indonesia Economic Forecast

Indonesia Economic Outlook

November 12, 2019

Economic momentum eased marginally in the third quarter according to recent data. Both private and government consumption slowed as the boost from election-related spending ebbed. Moreover, fixed investment growth fell to a three-year low, likely due in part to import controls. However, the contribution from the external sector strengthened, as these same controls led to a sharp fall in imports. Turning to the fourth quarter, economic activity is likely broadly unchanged, as recent substantial monetary easing should be providing support to the domestic economy. That said, signs from the manufacturing sector are discouraging: The PMI fell to a near four-year low in October amid lower production and new orders. Meanwhile, in the political arena, President Jokowi announced his new cabinet in mid-October. Market-friendly Sri Mulyani was reappointed as finance minister, boding well for business sentiment.

Indonesia Economic Growth

Economic growth is seen fairly stable next year. While fixed investment is seen picking up on recent tax incentives and greater infrastructure spending, this will be largely offset by a weaker external sector as imports rebound. Souring global trade relations and a slowdown in China pose downside risks. FocusEconomics panelists expect GDP growth of 5.1% in 2020, which is unchanged from last month’s forecast, and 5.3% in 2021.

Indonesia Economy Data

Population (million)249252256258261
GDP per capita (USD)3,6723,5323,3683,6073,885
GDP (USD bn)9148918619321,015
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)
Manufacturing (annual variation in %)
Retail Sales (annual variation in %)12.914.513.311.02.9
Unemployment Rate6.
Fiscal Balance (% of GDP)-2.5-2.2-2.6-2.5-2.6
Public Debt (% of GDP)24.924.727.028.029.4
Money (annual variation in %)12.811.
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
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)10,44911,86613,39213,30213,383
Current Account (% of GDP)-3.2-3.1-2.0-1.8-1.6
Current Account Balance (USD bn)-29.1-27.5-17.5-17.0-16.2
Trade Balance (USD billion)-4.1-
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)99.4112106116130
External Debt (% of GDP)29.132.936.134.334.7

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Indonesia Facts

Bond Yield7.35-0.05 %Sep 04
Exchange Rate14,1530.05 %Sep 04
Stock Market6,270-0.32 %Sep 04

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