Indonesia: Strong exports propel economy to buoyant growth in fourth quarter
February 7, 2011
In the fourth quarter, GDP grew 6.9% over the same quarter the year before, up from the 5.8% expansion registered in the previous quarter and above market analyst expectations of a 6.3% increase. In the full year 2010, GDP grew 6.1%, up from the 4.6% increase in 2009. The acceleration in the final quarter of last year was mainly driven by stronger external sector. On the domestic side, private consumption increased 4.4% year-on-year (Q3: +5.2% yoy), while investment added 8.7% (Q3: +9.2% yoy). Exports of goods and services accelerated from growth of 9.6% in the third quarter to 16.1% in the fourth. At the same time, imports expanded 16.9% (Q3: +12.2% yoy). As a result, the net contribution from the external sector to overall growth jumped from 0.1 percentage points in the third quarter to 1.6 percentage points in the fourth. At the sector level, the acceleration over the previous quarter was led by an increase in industry, which strengthened 8.9% (Q3: +8.3% yoy). The services sector posted growth of 5.0% in the fourth quarter (Q3: +3.9% yoy), which reflected a robust expansion within the transport and communication sub-sector (Q3: +13.2% yoy; Q4: +15.5% yoy). Finally, agriculture accelerated 3.8% in Q4 (Q3: +1.8% yoy). The Central Bank expects economic growth to accelerate to between 6.0% and 6.5% in 2011 and between 6.1% and 6.6% in 2012.