Indonesia: Economy maintains pace in the second quarter
August 5, 2011
In the second quarter, GDP grew 6.5% over the same quarter the year before, maintaining the pace of expansion observed in the previous quarter and coming in line with market expectations. Growth in the April-June period continued to be supported by vigorous domestic and, to a lesser extent, external demand. Private consumption increased 4.6% year-on-year (Q1: +4.5% yoy), while investment expanded 9.2% (Q1: +7.3% yoy). Exports of goods and services added 17.4% in the second quarter, up from 12.3% in the first. At the same time, imports grew 16.0% (Q1: +15.6% yoy). Owing to the acceleration in exports, the net contribution from the external sector to overall growth rose from 0.1 percentage points in the first quarter to 2.1 percentage points in the second. At the sector level, the expansion was led by an increase in services, which grew 8.3% (Q1: +8.3% yoy), boosted by trade, hotel and restaurants as well as by the transport and communication sub-sectors. The industrial sector grew 4.8% in the second quarter (Q1: +4.8% yoy) on the back of solid manufacturing activity. Finally, agriculture expanded 3.9% in Q2 (Q1: +3.6% yoy). The Central Bank expects the economy to grow between 6.3% and 6.8% in 2011 and between 6.4% and 6.9% in 2012.