Indonesia: Strong export sector drives Q4 GDP growth
February 5, 2014
In the fourth quarter, GDP grew 5.7% over the same quarter of the previous year. The expansion was just above the 5.6% increase observed in the third quarter and overshot market expectations of a 5.4% rise.
The Q4 reading reflected that an improvement in the external sector more than offset weaker domestic demand. Private consumption growth decreased from 5.5% in Q3 to 5.3% in Q4. Government consumption fell from 8.9% growth in Q3 to a 6.5% expansion in Q4. Meanwhile, fixed investment growth decreased slightly from 4.5% to 4.4%.
Exports rose 7.4% in Q4 (Q3: +5.2% year-on-year). Imports tumbled from 5.1% growth in Q3 to a 0.6% contraction in Q4. As a result, the external sector's net contribution to overall growth rebounded from minus 0.5 percentage points in the third quarter to plus 3.3 percentage points in the fourth.
In the full year 2013, GDP expanded 5.8%, which was down from the 6.3% increase tallied in 2012 and marked the lowest growth rate since 2009.
The Central Bank expects the economy to expand between 5.8% and 6.2% in 2014. FocusEconomics Consensus Forecast panelists are less optimistic than the Central Bank and expect the economy to expand 5.5% in 2014, which is unchanged from last month's forecast. For 2015, the panel sees economic growth at 5.8%.
Author: Carl Kelly, Economist