Indonesia Economic Forecast

Indonesia Economic Outlook

June 21, 2022

On the heels of a stable year-on-year GDP growth figure in Q1, the economy appears to be losing momentum in the second quarter. Domestically, private spending likely weakened: Retail sales slowed to an eight-month low in May amid a broad-based deterioration, while inflation rose to its highest level in over three years. Moreover, persistent supply constraints led the manufacturing PMI to moderate notably in May. Similarly, although the external sector likely benefitted from surging commodity prices, merchandise exports growth cooled remarkably in May. The slowdown came after the country implemented a controversial ban on palm oil exports in May, which it quickly reversed after three weeks amid widespread criticism. In response, President Joko Widodo dismissed the trade minister and reshuffled his cabinet on 15 June. Nonetheless, the policy reversal stands to rally exports ahead.

Indonesia Economic Growth

GDP should expand at a faster clip this year amid accelerating household spending and private investment. Less stringent Covid-19 restrictions and supportive monetary policy should fuel domestic demand. Moreover, the external sector stands to strengthen from higher commodity prices. That said, concerns over rising inflation and political uncertainty weigh on the outlook. FocusEconomics Consensus Forecast panelists expect GDP to expand 5.1% in 2022, which is unchanged from last month’s forecast. GDP is seen growing 5.0% in 2023.

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 %)
Consumption (annual variation in %)
Investment (annual variation in %)
Manufacturing (annual variation in %)
Retail Sales (annual variation in %)13.311.
Unemployment Rate6.
Fiscal Balance (% of GDP)-2.6-2.5-2.6-1.7-2.2
Public Debt (% of GDP)
Money (annual variation in %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
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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