In line with our forecast, Indonesia’s economic growth continued to accelerate in 2018. Based on data from Statistics Indonesia (Badan Pusat Statistik, or BPS), which were released in early February 2019, the country’s gross domestic product (GDP) expanded 5.17 percent year-on-year (y/y) in full-year 2018, up from a growth rate of 5.07 percent in the preceding year.
In our opinion it is a good result, particularly considering the global economic slowdown (led by the slowdown in China, Indonesia’s biggest trading partner) and the high degree of uncertainty in financial markets across the globe.
Over the past couple of years, we have emphasized repeatedly that the economic rebound of Indonesia – after the country had experienced an economic slowdown between 2011 and 2015 – comes at a very gradual pace. Considering global economic growth has remained subdued (implying that Indonesia’s export performance is not expected to improve in the short run), while structural reforms (that have been set in motion by the Indonesian government under the Joko Widodo administration) take time to truly materialize, Indonesia’s accelerating economic growth will continue to go at a slow pace. On a positive note, it means that growth is structural.
Read the article in the February 2019 edition of our monthly research report. You can purchase the report by sending an email to email@example.com or a WhatsApp message to the following number: +62(0)8788.410.6944
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