Indonesia Economic Forecast

Indonesia Economic Outlook

August 24, 2021

The economy rebounded in the second quarter, supported by expansionary fiscal and monetary policies. A broad-based improvement in domestic demand was behind Q2’s reading, as household and government spending as well as fixed investment all improved compared to the previous quarter. On the downside, the external sector dragged on the economy. Meanwhile, economic conditions have seemingly worsened considerably so far in the third quarter. The country saw Covid-19 infections and deaths surging from mid-June until early August, which prompted the government to temporarily tighten containment measures amid a strained healthcare system and vaccine shortages. The situation was reflected in plunging consumer confidence and a falling manufacturing PMI in July, which spells trouble for activity in Q3.

Indonesia Economic Growth

This year, the economy is set to rebound amid reviving domestic and foreign demand, expansionary fiscal and monetary policy stances, sustained infrastructure spending and the gradual lifting of restrictions. That said, the recent worsening of the health crisis will restrain the pace of recovery. FocusEconomics Consensus Forecast panelists expect GDP to expand 3.8% in 2021, which is down 0.5 percentage points from last month’s forecast. In 2022, GDP is seen growing 5.1%.

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 %)4.95.05.15.25.0
Consumption (annual variation in %)5.05.04.95.15.0
Investment (annual variation in %)5.04.56.26.64.4
Manufacturing (annual variation in %)4.34.34.34.33.8
Retail Sales (annual variation in %)13.311.02.93.73.9
Unemployment Rate6.25.65.55.35.3
Fiscal Balance (% of GDP)-2.6-2.5-2.6-1.7-2.2
Public Debt (% of GDP)27.028.029.430.130.4
Money (annual variation in %)9.010.08.36.36.5
Inflation Rate (CPI, annual variation in %, eop)3.43.03.63.22.6
Inflation Rate (CPI, annual variation in %)6.43.53.83.32.8
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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