Indonesia Economic Forecast

Indonesia Economic Outlook

May 22, 2018

A muted performance by the external sector caused year-on-year GDP growth to decelerate in the first quarter. While waning trade momentum and subdued prices for Indonesian commodities weighed on export growth, imports soared at a double-digit rate, underscoring that the domestic economy was in good shape. More recent data from Q2 is mixed and suggests that the domestic economy continues to perform strongly while weakness lingers in the external sector. In April, the manufacturing PMI reached an over one-year high, and consumer confidence edged higher. However, the trade balance posted the largest deficit in four years. The weak trade figure put pressure on the currency, which crossed the 14,000 IDR per USD threshold on 15 May amid heightened volatility due to growing concerns that faster-than-expected monetary tightening in the U.S. will result in capital outflows from the economy.

Indonesia Economic Growth

The economy is expected to accelerate marginally this year on the back of solid growth in government consumption and fixed investment. Risks, however, are tilted to the downside as prices for key commodities remain depressed and declining external demand growth could weigh on the external sector. Likewise, the economy is vulnerable to capital outflows, which could be a source of financial instability. FocusEconomics panelists see GDP growth of 5.3% in 2018, unchanged from last month’s forecast. In 2019, the economy is seen growing 5.4%.

Indonesia Economy Data

Population (million)249252255259262
GDP per capita (USD)3,6723,5323,3693,6053,876
GDP (USD bn)9148918619331,015
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)-2.2-2.1-2.6-2.5-2.6
Public Debt (% of GDP)22.024.327.528.930.5
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)-3.2-3.1-2.0-1.8-1.7
Current Account Balance (USD bn)-29.1-27.5-17.5-17.0-17.5
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)29.132.936.134.334.8

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Indonesia Facts

Bond Yield7.28-0.05 %Jun 08
Exchange Rate13,9300.05 %Jun 14
Stock Market5,994-0.32 %Jun 08

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