Indonesia: GDP growth reaches lowest point in over three years
August 2, 2013
In the second quarter, GDP grew 5.8% over the same quarter last year. The figure was slightly below both the 6.0% increase observed in the first quarter and market expectations, which saw GDP expanding at a pace of 5.9%. GDP growth is now at its lowest point in more than three years.
The Q2 reading reflected a weakening in domestic demand. Private consumption diminished from 5.2% growth in the first quarter to 5.0% in the second. Government consumption, on the other hand, increased from a rate of 0.4% in the first quarter to 2.2% in the second. Meanwhile, fixed investment rose 4.7% in the second quarter (Q1 2013: +5.8% year-on-year).
Exports rose 4.8% in Q2, (Q1: 3.6% year-on-year). Imports were also up, increasing by 0.6% in the second quarter, which contrasted the first quarter's flat growth. As exports outpaced imports, the external sector's net contribution to overall growth increased from 1.4 percentage points in the first quarter to 1.6 percentage points in the second.
The Central Bank expects the economy to expand between 6.2% and 6.6% in 2013 and between 6.6% and 7.0% in 2014. FocusEconomics Consensus Forecast panellists are less optimistic than the Central Bank and expect the economy to expand 6.0% in 2013, which is down 0.1 percentage points from last month's forecast. For 2014, the panel sees economic growth at 6.1%.
Author: Carl Kelly, Economist