Indonesia skyline

Indonesia Economic Forecast

Indonesia Economic Outlook

After growing faster in Q2 than in Q1 on improving domestic activity year on year, GDP is likely expanding more slowly in Q3 as the external sector should be weighing on overall growth; annual merchandise exports fell more in July–August than in Q2 amid sluggish foreign demand. In the same period, retail sales growth eased from April–June, hinting at cooling private spending. More positively, conditions in the manufacturing sector improved at a stronger pace in August, with output, new orders and employment strengthening. In other news, Indonesia’s meteorology agency warned in September that this year’s rainy season will be delayed due to the El Niño weather event, boding ill for agricultural output; the ongoing hot and dry spell has already disrupted rice output and pushed prices up. In response, authorities pledged USD 521 million in social aid for low-income households through November.

Indonesia Inflation

Inflation rose to 3.3% in August (July: 3.1%), driven by stronger price growth for food and transport. Our panel anticipates 2023 inflation to average below last year’s level on tighter monetary policy and lower commodity prices year on year. A stronger-than-expected El Niño provoking food and energy price spikes poses an upside risk to prices.

This chart displays Economic Growth (GDP, annual variation in %) for Indonesia from 2013 to 2022.

Indonesia Economic Data

2018 2019 2020 2021 2022
Population (million) 264 267 270 272 275
GDP (USD bn) 1,043 1,120 1,062 1,188 1,319
GDP per capita (USD) 3,946 4,195 3,930 4,362 4,798
GDP (IDR tn) 14,839 15,833 15,443 16,977 19,588
Economic Growth (Nominal GDP, ann. var. %) 9.2 6.7 -2.5 9.9 15.4
Economic Growth (GDP, ann. var. %) 5.2 5.0 -2.1 3.7 5.3
Domestic Demand (ann. var. %) 6.3 3.9 -3.8 2.9 3.8
Private Consumption (ann. var. %) 5.1 5.0 -2.6 2.0 4.9
Government Consumption (ann. var. %) 4.8 3.3 2.1 4.2 -4.5
Fixed Investment (ann. var. %) 6.7 4.5 -5.0 3.8 3.9
Exports (G&S, ann. var. %) 6.5 -0.5 -8.4 18.0 16.3
Imports (G&S, ann. var. %) 12.1 -7.1 -17.6 24.9 14.7
Manufacturing Production (ann. var. %) 4.3 3.8 -2.9 3.4 4.9
Retail Sales (ann. var. %) 3.7 3.8 -11.9 0.0 6.0
Unemployment (% of active population, eop) 5.3 5.2 7.1 6.5 5.9
Fiscal Balance (% of GDP) -1.8 -2.2 -6.1 -4.6 -2.4
Public Debt (% of GDP) 30.4 30.6 39.7 41.1 39.9
Money (ann. var. of M2 %) 6.3 6.5 12.5 14.0 8.4
Inflation (CPI, ann. var. %, eop) 3.1 2.6 1.7 1.9 5.5
Inflation (CPI, ann. var. %, aop) 3.2 2.8 2.0 1.6 4.2
Inflation (Core, ann. var. %, aop) 2.8 3.0 2.3 1.4 2.8
Inflation (WPI, ann. var. %, aop) 5.5 1.1 2.4 2.6 4.7
BI 7-day Reverse Repo Rate (%, eop) 6.00 5.00 3.75 3.50 5.50
3-Month JIBOR (%, eop) 7.70 5.51 4.06 3.75 6.62
10-Year Bond Yield (%, eop) 8.11 7.28 6.17 6.55 7.01
Stock Market (ann. var. of IDX %) -2.5 1.7 -5.1 10.1 4.1
Exchange Rate (IDR per USD, eop) 14,380 13,883 14,050 14,253 15,568
Exchange Rate (IDR per USD, aop) 14,234 14,141 14,543 14,295 14,853
Current Account Balance (USD bn) -30.6 -30.3 -4.4 3.5 12.7
Current Account Balance (% of GDP) -2.9 -2.7 -0.4 0.3 1.0
Merchandise Trade Balance (USD bn) -0.2 3.5 28.3 43.8 62.7
Merchandise Exports (USD bn) 181 168 163 233 293
Merchandise Imports (USD bn) 181 165 135 189 230
Merchandise Exports (ann. var. %) 7.0 -6.8 -3.0 42.5 25.6
Merchandise Imports (ann. var. %) 20.6 -8.8 -18.1 39.9 21.6
Foreign Direct Investment (USD bn) 20.6 23.9 18.6 21.1 22.0
International Reserves (USD bn) 121 129 136 145 137
International Reserves (months of imports) 8.0 9.4 12.1 9.2 7.2
External Debt (USD bn) 375 404 417 414 397
External Debt (% of GDP) 36.0 36.0 39.3 34.9 30.1

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