Indonesia: Indonesian economy maintains momentum in the third quarter
November 7, 2011
In the third quarter, GDP grew 6.5% over the same quarter the year before, maintaining the pace of expansion observed in the two previous quarters and coming in slightly below market expectations of a 6.6% increase. Strong exports and the continued resilience of domestic demand buttressed economic growth in the July-September period. Private consumption increased 4.8% year-on-year (Q2: +4.6% yoy), while investment expanded 7.1% (Q2: +9.4% yoy). Exports of goods and services accelerated from 17.5% in the second quarter to 18.5% in the third, while imports grew 14.2% in the third quarter, which was slower than the 15.2% pace recorded in the second quarter. As exports gathered pace, the net contribution from the external sector to overall growth rose from 2.4 percentage points in the second quarter to 3.3 percentage points in the third. At the sector level, the expansion was led by an increase in services, which grew 8.5% year-on-year (Q2: +8.3% yoy), buttressed by the trade, hotel and restaurant sub-sectors. The industrial sector grew 5.1% in the second quarter (Q2: +4.8% yoy) on the back of solid manufacturing activity. Finally, agriculture expanded 2.6%, which was below the 3.9% increase observed in the second quarter. 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.