Indonesia Economic Forecast

Indonesia Economic Outlook

November 14, 2017

Economic momentum disappointed in the third quarter, with GDP growth only edging up a notch to 5.1% annually. The uptick was driven by accelerations in fixed investment and government spending, while household spending was stable at the previous quarter’s reading and inventories dragged on the result. An improvement in the business climate supported the robust growth in investment, while the government’s ambitious reforms and infrastructure program have also borne fruit. More recent data point to a soft start to the fourth quarter: The manufacturing PMI fell in October and consumer confidence eased. In the political arena, the parliament approved the 2018 budget at the end of October. The targeted deficit of 2.19% of GDP is ambitiously smaller than the revised 2.92% deficit planned for 2017. Notably, while infrastructure remains a high priority, its share of expenditure was broadly unchanged from 2017—a contrast from the Widodo government’s previous budgets, which ramped up its share of expenditure.

Indonesia Economic Growth

Growth is projected to gradually strengthen as government spending and investment pick up pace. Key risks to the country’s outlook stem from rising political noise ahead of the 2019 election or a sharp slowdown in China’s economy. FocusEconomics panelists see GDP expanding 5.3% in 2018, which is unchanged from last month’s forecast. In 2019, the economy is seen growing 5.4%.

Indonesia Economy Data

20122013201420152016
Population (million)245249252255259
GDP per capita (USD)3,7503,6723,5323,3713,605
GDP (USD bn)920914891861933
Economic Growth (GDP, annual variation in %)6.05.65.04.95.0
Consumption (annual variation in %)5.55.45.15.05.0
Investment (annual variation in %)9.15.04.45.04.5
Manufacturing (annual variation in %)5.64.44.64.84.0
Retail Sales (annual variation in %)14.512.914.513.311.0
Unemployment Rate6.16.25.96.25.6
Fiscal Balance (% of GDP)-1.8-2.2-2.1-2.6-2.5
Public Debt (% of GDP)21.422.024.327.528.9
Money (annual variation in %)15.012.811.99.010.0
Inflation Rate (CPI, annual variation in %, eop)3.78.18.43.43.0
Inflation Rate (CPI, annual variation in %)4.06.46.46.43.5
Inflation (WPI, annual variation in %)5.16.09.3-  -  
Policy Interest Rate (%)5.757.507.757.504.75
Stock Market (annual variation in %)12.9-1.022.3-12.115.3
Exchange Rate (vs USD)9,63812,17012,38513,78813,473
Exchange Rate (vs USD, aop)9,36210,44911,86613,39213,302
Current Account (% of GDP)-2.7-3.2-3.1-2.0-1.8
Current Account Balance (USD bn)-24.4-29.1-27.5-17.5-16.9
Trade Balance (USD billion)-1.7-4.1-2.27.79.5
Exports (USD billion)190183176150145
Imports (USD billion)192187178143136
Exports (annual variation in %)-6.6-3.9-3.6-14.6-3.4
Imports (annual variation in %)8.0-2.6-4.5-19.9-4.9
International Reserves (USD)11399.4112106116
External Debt (% of GDP)27.429.132.936.134.0

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Indonesia Facts

ValueChangeDate
Bond Yield6.51-0.05 %Dec 06
Exchange Rate13,5390.05 %Dec 06
Stock Market6,036-0.32 %Dec 06

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