Indonesia skyline

Indonesia Economic Forecast

Indonesia Economic Outlook

The economy lost steam in the fourth quarter of last year, with year-on-year growth decelerating from Q3. Private consumption growth slowed, restrained by sustained high inflation, as did fixed investment growth amid higher interest rates. Moreover, the expansion in exports softened amid a less supportive global economic environment. Meanwhile, public spending decreased at a sharper pace as the government continued to tighten the purse strings following the recent reinstatement of the 3.0% fiscal deficit cap. A high base of comparison should translate into a further deceleration in year-on-year GDP growth in the current quarter. That said, available data points to strengthening underlying conditions: In January, the manufacturing PMI moved further into expansionary terrain, and inflation eased. However, tighter financing conditions are likely putting a lid on investment activity.

Indonesia Inflation

Inflation came in at 5.3% in January, down from December’s 5.5%. January’s result was the lowest reading since August 2022 and was mainly driven by softer price pressures for food and transport. Inflation should decline gradually this year, but it will remain elevated owing to pass-through effects. China’s economic reopening and volatile energy prices pose upside risks.

Indonesia Economic Data

2017 2018 2019 2020 2021
Population (million) 261.4 264.2 266.9 270.2 272.2
GDP (USD bn) 1 1 1 1 1
GDP per capita (USD) 3 3 4 3 4
GDP (IDR tn) 13 14 15 15 16
Economic Growth (Nominal GDP, ann. var. %) 9.6 9.2 6.7 -2.5 9.9
Economic Growth (GDP, ann. var. %) 5.1 5.2 5.0 -2.1 3.7
Domestic Demand (ann. var. %) 5.0 6.3 3.9 -3.8 2.9
Private Consumption (ann. var. %) 4.9 5.1 5.0 -2.6 2.0
Government Consumption (ann. var. %) 2.1 4.8 3.3 2.1 4.2
Fixed Investment (ann. var. %) 6.2 6.7 4.5 -5.0 3.8
Exports (G&S, ann. var. %) 8.9 6.5 -0.5 -8.4 18.0
Imports (G&S, ann. var. %) 8.1 12.1 -7.1 -17.6 24.9
Manufacturing Production (ann. var. %) 4.3 4.3 3.8 -2.9 3.4
Retail Sales (ann. var. %) 2.9 3.7 3.8 -11.9 0.0
Unemployment (% of active population, eop) 5.5 5.3 5.2 7.1 6.5
Fiscal Balance (% of GDP) -2.5 -1.8 -2.2 -6.1 -4.6
Public Debt (% of GDP) 29.4 30.4 30.6 39.8 41.2
Money (ann. var. of M2 %) 8.3 6.3 6.5 12.5 14.0
Inflation (CPI, ann. var. %, eop) 3.6 3.1 2.6 1.7 1.9
Inflation (CPI, ann. var. %, aop) 3.8 3.2 2.8 2.0 1.6
Inflation (Core, ann. var. %, aop) 3.1 2.8 3.0 2.3 1.4
Inflation (WPI, ann. var. %, aop) 4.6 5.5 1.1 2.4 2.6
BI 7-day Reverse Repo Rate (%, eop) 4.25 6.00 5.00 3.75 3.50
3-Month JIBOR (%, eop) 5.48 7.70 5.51 4.06 3.75
10-Year Bond Yield (%, eop) 6.62 8.11 7.28 6.17 6.55
Stock Market (ann. var. of IDX %) 20.0 -2.5 1.7 -5.1 10.1
Exchange Rate (IDR per USD, eop) 13.00 14.00 13.00 14.00 14.00
Exchange Rate (IDR per USD, aop) 13.00 14.00 14.00 14.00 14.00
Current Account Balance (USD bn) -16.2 -30.6 -30.3 -4.4 3.5
Current Account Balance (% of GDP) -1.6 -2.9 -2.7 -0.4 0.3
Merchandise Trade Balance (USD bn) 11.8 -8.7 -3.6 21.6 35.4
Merchandise Exports (USD bn) 169 180 168 163 232
Merchandise Imports (USD bn) 157 189 171 142 196
Merchandise Exports (ann. var. %) 16.3 6.6 -6.8 -2.7 41.9
Merchandise Imports (ann. var. %) 15.7 20.2 -9.2 -17.3 38.6
Foreign Direct Investment (USD bn) 20.6 20.6 23.9 18.6 20.1
International Reserves (USD bn) 130 121 129 136 145
International Reserves (months of imports) 10.0 7.7 9.1 11.5 8.9
External Debt (USD bn) 352 375 404 417 414
External Debt (% of GDP) 34.7 36.0 36.0 39.3 34.9

Free Sample Report

Interested in Indonesia economic reports, analysis and data? FocusEconomics provides data, forecasts and analysis for hundreds of countries and commodities. Request your free sample report now.

Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest