Investment in Indonesia
Indonesia - Investment
Economy charts steady course in Q2 despite choppy external waters
The economy expanded 5.0% in Q2 2019, according to recent data released by Statistics Indonesia. This was down a notch from Q1’s 5.1% reading but matched market expectations.
Domestic demand had a strong showing. Private consumption expanded 5.2% (Q1: +5.0% yoy), likely supported by a solid labor market and mild inflation. Public consumption growth picked up amid election-related spending (Q2: +8.2% yoy; Q1: +5.2% yoy). However, fixed investment was sluggish by recent standards (Q2: +5.0% yoy; Q1: +5.0% yoy), likely due to the government’s restrictions on capital imports holding back infrastructure development.
The external sector continued to contribute to growth in the second quarter, although this was chiefly thanks to a further sharp decline in imports (Q2: -6.7% yoy; Q1: -7.4% yoy). Exports also fell, amid sagging global trade flows and U.S.-China tensions (Q2: -1.8% yoy; Q1: -1.9% yoy).
Looking to H2, our panelists see growth at close to its current level. Wage gains and mild price pressures should aid private consumption, while government spending should also be robust. However, the external environment will remain challenging, hampering exports.
Turning to 2020, analysts at Nomura are upbeat about prospects:
“The improvement we expect in growth next year will be supported by improving reform prospects, particularly on the business climate, given the re-election of President Jokowi to a second and final term with a stronger mandate, as well as the utilization of available fiscal space and steady progress on infrastructure projects.”
FocusEconomics Consensus Forecast panelists see GDP expanding 5.1% in 2019 and 5.2% in 2020.
Indonesia - Investment Data
|Investment (annual variation in %)||5.0||4.4||5.0||4.5||6.2|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||7.38||-0.05 %||Jul 31|
|Exchange Rate||14,017||0.05 %||Jul 31|
|Stock Market||6,391||-0.32 %||Jul 31|
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August 15, 2019
According to Statistics Indonesia, the country recorded a trade deficit of USD 0.1 billion in July, contrasting June’s USD 0.3 billion surplus.
August 8, 2019
In June, retail sales fell 1.8% year-on-year, contrasting May’s 7.7% expansion and missing the Central Bank’s initial estimate of a 2.2% expansion.
August 5, 2019
The economy expanded 5.0% in Q2 2019, according to recent data released by Statistics Indonesia.
August 1, 2019
Conditions in Indonesia’s manufacturing sector worsened in July, according to the Purchasing Managers’ Index (PMI) released by IHS Markit and Nikkei, with the PMI decreasing from 50.6 in June to 49.6.
August 1, 2019
Consumer prices increased 0.31% over the prior month in July, down from June’s 0.55% uptick, and driven by higher prices for food and clothing.