Indonesia Economic Forecast

Indonesia Economic Outlook

July 16, 2019

In the second quarter of the year, growth should have been broadly unchanged from that of the first quarter. Domestic signs are generally encouraging: Retail sales grew rapidly in April and May, likely supported by buoyant consumer confidence, while the manufacturing PMI averaged higher than in Q1. However, goods exports plummeted in April and May, while tourist arrivals stagnated over the same period, potentially dampened by recent floods. That said, lower imports, amid government measures to contain the current account deficit, could have offset the damage to the external sector in the second quarter. Meanwhile, in other news, the government has recently announced a raft of tax incentives to support the property sector and firms who invest in employee training and research and development, in a bid to boost the economy.

Indonesia Economic Growth

Growth should be robust this year, with private consumption buttressed by a strong labor market and optimistic consumer sentiment. However, fixed investment will be held back by government measures to curb imports. Downside risks stem from global trade tensions and the rupiah’s vulnerability to global financial volatility. FocusEconomics panelists expect GDP growth of 5.1% in 2019, which is unchanged from last month’s forecast. For 2020, panelists see the economy expanding 5.2%.

Indonesia Economy Data

20132014201520162017
Population (million)249252256258261
GDP per capita (USD)3,6723,5323,3683,6073,885
GDP (USD bn)9148918619321,015
Economic Growth (GDP, annual variation in %)5.65.04.95.05.1
Consumption (annual variation in %)5.45.15.05.04.9
Investment (annual variation in %)5.04.45.04.56.2
Manufacturing (annual variation in %)4.44.64.34.34.3
Retail Sales (annual variation in %)12.914.513.311.02.9
Unemployment Rate6.25.96.25.65.5
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 %)12.811.99.010.08.3
Inflation Rate (CPI, annual variation in %, eop)8.18.43.43.03.6
Inflation Rate (CPI, annual variation in %)6.46.46.43.53.8
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)-4.1-2.27.79.511.8
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

ValueChangeDate
Bond Yield7.23-0.05 %Jul 11
Exchange Rate14,0650.05 %Jul 11
Stock Market6,417-0.32 %Jul 11

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