Indonesia Economic Forecast

Indonesia Economic Outlook

July 21, 2020

The economy likely contracted sharply in the second quarter due to containment measures at home and abroad. Retail sales were down around 20% in May, and the Central Bank expects a further double-digit decline in June, suggesting depressed private consumption. In addition, the manufacturing PMI was deep in contractionary territory throughout the quarter amid soft output and new orders. Moreover, administrative and communicative difficulties have hampered the rollout of the government’s USD 49 billion stimulus package, likely accentuating the downturn. While economic conditions should have improved at the tail end of Q2 and heading into Q3 thanks to the easing of social distancing restrictions in June and recoveries abroad, elevated new Covid-19 cases continue to dampen momentum, and risk the snap-back of health restrictions.

Indonesia Economic Growth

The economy is expected to shrink in 2020, due to the prolonged domestic coronavirus outbreak hitting demand. However, fiscal and monetary stimulus should prop up activity somewhat. Downside risks include elevated new Covid-19 cases, which could necessitate new restrictions, and currency volatility. FocusEconomics panelists project GDP to contract 0.8% in 2020, which is down 0.4 percentage points from last month’s forecast, and to expand 5.5% in 2021.

Indonesia Economy Data

2015 2016 2017 2018 2019
Population (million)256258261264267
GDP per capita (USD)3,3683,6073,8853,9464,194
GDP (USD bn)8619321,0151,0421,120
Economic Growth (GDP, annual variation in %)4.95.05.15.25.0
Consumption (annual variation in %)5.05.04.95.15.0
Investment (annual variation in %)5.04.56.26.64.4
Manufacturing (annual variation in %)4.34.34.34.33.8
Retail Sales (annual variation in %)13.311.02.93.73.9
Unemployment Rate6.25.65.55.35.3
Fiscal Balance (% of GDP)-2.6-2.5-2.6-1.7-2.2
Public Debt (% of GDP)27.028.029.430.130.4
Money (annual variation in %)9.010.08.36.36.5
Inflation Rate (CPI, annual variation in %, eop)3.43.03.63.22.6
Inflation Rate (CPI, annual variation in %)6.43.53.83.32.8
Inflation (WPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)7.504.754.256.005.00
Stock Market (annual variation in %)-12.115.320.0-2.51.7
Exchange Rate (vs USD)13,78813,47313,56814,38013,883
Exchange Rate (vs USD, aop)13,39213,30213,38314,23314,141
Current Account (% of GDP)-2.0-1.8-1.6-2.9-2.7
Current Account Balance (USD bn)-17.5-17.0-16.2-30.6-30.4
Trade Balance (USD billion)7.79.511.8-8.7-3.2
Exports (USD billion)150145169180167
Imports (USD billion)143136157189171
Exports (annual variation in %)-14.6-3.416.36.6-7.0
Imports (annual variation in %)-19.9-4.915.720.2-9.5
International Reserves (USD)106116130121129
External Debt (% of GDP)36.134.334.736.036.1

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Indonesia Facts

Value Change Date
Bond Yield7.10-0.05 %Dec 31
Exchange Rate13,8830.05 %Jan 01

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