5-2-2024 (JAKARTA) Indonesia experienced a slowdown in its GDP growth in 2023 as it recorded a growth rate of 5.1%, according to data released by the country’s statistics bureau. While the growth rate remained solid, it was slightly lower than the 5.3% recorded in the previous year. The decline can be attributed to a contraction in exports due to falling commodity prices.
Throughout the year, Indonesia faced challenges as prices of key commodities like palm oil, coal, and nickel dropped, impacting the overall export performance. Additionally, weakening global growth led to softened demand from major trade partners, further dampening export prospects. The country’s largest economy was also affected by the central bank’s rate hikes, which totaled 250 basis points between August 2022 and October 2023. These rate increases had a direct impact on domestic consumption.
In the final quarter of 2023, Indonesia’s GDP grew by 5.04% year-on-year, in line with economists’ forecast of 5%. The government has set a target of 5.3% GDP growth for the current year, with hopes that campaign spending for the upcoming presidential and legislative elections on February 14 will boost domestic demand. Additionally, the transition of power after the elections is expected to reduce uncertainty and potentially attract further investment.
The statistics bureau is scheduled to release a detailed breakdown of the GDP data later today, providing a comprehensive analysis of the various sectors contributing to the overall economic performance.
