GDP in Indonesia
Indonesia - GDP
Growth dips slightly in Q1 but remains solid
The economy expanded 5.1% in Q1 2019, according to recent data released by Statistics Indonesia. This was down a notch from Q4’s 5.2% reading and slightly undershot market expectations, although growth was likely still somewhat above the regional average.
Domestic demand was healthy in the first quarter. Private consumption expanded 5.0% (Q4: +5.1% yoy), likely supported by low unemployment, mild inflation and government support to lower-income voters in the build-up to the April general elections. Public consumption growth was also brisk (Q1: +5.2% yoy; Q4: +4.6% yoy), underpinned by pre-election spending. However, the expansion in fixed investment was the slowest since Q2 2017 (Q1: +5.0% yoy; Q4: 6.0% yoy), potentially dampened by political uncertainty in the run-up to the polls.
Moreover, the external sector continued to strengthen in the first quarter. This was largely thanks to a sharp decline in imports (Q1: -7.8% yoy; Q4: +7.1% yoy), reflective of government measures to tame the current account deficit. However, exports also declined amid tepid external demand (Q1: -2.1% yoy; Q4: +4.3% yoy). As a result, the net contribution from the external sector swung from a 0.6 percentage-point subtraction to a 1.3 percentage-point contribution.
Looking ahead, our panelists see growth continuing to track marginally above 5%. Private consumption should be supported by the strong labor market and government financial assistance to households, while fixed investment should benefit from greater policy certainty following the apparent victory for incumbent Joko Widodo in the presidential elections. However, ebbing global growth could continue to hurt exports.
Analysts at Nomura are fairly bullish on prospects for this year, thanks to “improving reform prospects, particularly on the business climate; targeted fiscal incentives to develop the manufacturing base; and more implementation of infrastructure, which should boost productivity and reduce business and logistics costs”.
FocusEconomics Consensus Forecast panelists see GDP expanding 5.1% in 2019 and 5.2% in 2020.
Indonesia - GDP Data
|Economic Growth (GDP, annual variation in %)||5.6||5.0||4.9||5.0||5.1|
5 years of economic forecasts for more than 30 economic indicators.
Indonesia GDP Chart
Source: Statistics Indonesia.
|Bond Yield||7.46||-0.05 %||Jun 20|
|Exchange Rate||14,183||0.05 %||Jun 20|
|Stock Market||6,336||-0.32 %||Jun 20|
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Indonesia: Bank Indonesia leaves rates unchanged in June, but signals possible loosening further ahead
June 20, 2019
At its 19-20 June monetary policy meeting, Bank Indonesia (BI) left the seven-day reverse repo rate at 6.00% for the seventh consecutive meeting, in line with market expectations.
June 14, 2019
In April, retail sales expanded 6.7% in annual terms, down from March’s 10.1% growth but above the Bank’s initial estimate of 5.7%.
June 10, 2019
Consumer prices increased 0.68% in May over the previous month, up from April’s 0.44% increase.
June 3, 2019
Conditions in Indonesia’s manufacturing sector improved at a faster pace in May, according to the Purchasing Managers’ Index (PMI) released by IHS Markit and Nikkei, with the PMI increasing from 50.4 in April to 51.6 in May.
May 16, 2019
At its 15-16 May monetary policy meeting, Bank Indonesia (BI) left the seven-day reverse repo rate at 6.00% for the sixth consecutive meeting, in line with market expectations.