Investment in Indonesia

Indonesia Investment | Economic News & Forecasts

Indonesia - Investment

GDP contracts at milder pace in the fourth quarter

GDP slid at a more moderate rate of 2.2% year-on-year in the fourth quarter of 2020, above the 3.5% contraction seen in the third quarter, as domestic lockdown measures were eased somewhat and external demand recovered slightly.

Private consumption dropped a softer 3.6% year-on-year in Q4, following the 4.0% contraction in Q3. Fixed investment also fell at a milder pace of 6.2% in Q4, up from the 6.5% contraction recorded in the prior quarter. In contrast, public consumption cooled, growing 1.8% in Q4 (Q2: +9.8% yoy), as the government’s stimulus measures waned.

On the external front, exports of goods and services dropped at a softer rate of 7.2% in Q4 (Q3: -11.7% yoy). Likewise, imports of goods and services declined at a milder pace of 13.5% in Q4 (Q3: -23.0% yoy). As a result, the external sector made a positive contribution to growth.

Commenting on the release, Nicholas Mapa, senior economist at ING, stated:

“As Indonesia records its first annual contraction since the 1998 Asian financial crisis, the path to more easing remains wide open with the rupiah stability the likely determinant for the timing of the next rate cut.”

Looking ahead, GDP is set to rebound robustly this year, spurred by recovering household and capital spending amid supportive fiscal and monetary policies, and recovering external demand. Uncertainty over the evolution of the health crisis and the rollout of vaccines clouds the outlook, however.

FocusEconomics Consensus Forecast panelists expect GDP to expand 5.0% in 2021, which is down 0.2 percentage points from last month’s forecast. In 2022, GDP is seen growing 5.2%.

Indonesia - Investment Data

2015   2016   2017   2018   2019  
Investment (annual variation in %)5.0  4.5  6.2  6.6  4.4  

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Indonesia Facts

Value Change Date
Bond Yield7.10-0.05 %Dec 31
Exchange Rate13,8830.05 %Jan 01

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