7-8-2023 (JAKARTA) Indonesia’s economy defied expectations by accelerating its growth in the last quarter, overcoming challenges such as higher interest rates, rising prices, and a slowdown in commodity markets.
According to the country’s statistics office, gross domestic product (GDP) increased by 5.17% in the three months ending in June compared to the same period last year. This outperformed the median forecast of 5% from a Bloomberg survey of economists, as well as surpassing the growth recorded in the previous two quarters.
In terms of quarterly performance, the economy expanded by 3.86% compared to the January-March period, which was faster than the estimated 3.7% growth.
This robust performance in the last quarter highlights the resilience of Southeast Asia’s largest economy, even as key growth factors have faced challenges. Elevated prices and high borrowing costs, which reached a four-year peak, have dampened both consumer spending and investment. Additionally, the global commodities downturn has had a negative impact on exports.
These positive figures position Indonesia well to achieve its full-year GDP growth target of 5%-5.3%, as projected by Finance Minister Sri Mulyani Indrawati just last week. The upcoming spending associated with the February 2024 elections and an uptick in manufacturing activity are expected to counterbalance weak demand from export markets, including China.
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