Indonesia Economic Outlook
February 25, 2020Growth clocked 5.0% again in the final quarter of 2019. While the domestic economy was weak, as ebbing government consumption and fixed investment outweighed upbeat private consumption, the external sector continued to support the economy due to a further sharp fall in imports, amid the government’s import substitution policies. Meanwhile, early signs in 2020 are downbeat: In January, the manufacturing PMI continued to signal worsening operating conditions, exports fell and consumer confidence declined amid rising fears over the coronavirus outbreak. Moreover, the virus is likely now affecting the external sector via reduced Chinese demand. In politics, the government introduced the omnibus bill—which aims to cut red tape and attract more foreign investment—to Parliament in mid-February. However, certain elements of the bill, such as changes to labor laws, could generate opposition.
Indonesia Economic GrowthGrowth is seen broadly stable this year. Fixed investment growth should accelerate on stronger government infrastructure spending, although this will be offset by a recovery in imports and the coronavirus weighing on the external sector. A potential worsening of the viral outbreak poses a downside risk, while the passage of the omnibus bill is an upside risk. FocusEconomics panelists expect GDP growth of 5.0% in 2020, which is down 0.1 percentage points from last month’s forecast, and 5.2% in 2021.
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
March 19, 2020
At its 18–19 March monetary policy meeting, Bank Indonesia (BI) trimmed the seven-day reverse repo rate to 4.50% from 4.75% and also cut the deposit facility and lending facility rates by 25 basis points to 3.75% and 5.25% respectively.
Indonesia: Rupiah plunges despite Central Bank intervention as coronavirus fears cause flight to safety
March 18, 2020
The rupiah traded at IDR 15,218 per USD on 18 March, marking a 10.2% depreciation from the same day of the previous month.
March 16, 2020
Indonesia posted a trade surplus of USD 2.3 billion in February, contrasting January’s revised USD 0.6 billion deficit (previously reported: USD 0.9 billion deficit) and confounding market expectations of a small deficit.
March 10, 2020
In January, retail sales decreased 0.3% year-on-year, coming after December’s 0.5% drop but a softer decline than the Central Bank’s initial estimate.
March 2, 2020
Consumer prices increased 0.28% month-on-month in February, down from January’s 0.39% rise.