Economic growth of Indonesia was weaker-than-estimated in the first quarter of 2016. According to the latest data from Statistics Indonesia (BPS), released today (04/05), Indonesia's gross domestic product (GDP) growth reached 4.92 percent (y/y) in Q1-2016. Most analysts expected to see a GDP growth pace slightly above the 5 percent (y/y) mark and therefore the publication of BPS was disappointing and raises questions whether Indonesia's economic growth can in fact accelerate significantly in 2016.
Although failing to meet analyst expectations, it is a positive sign that Indonesia's Q1-2016 GDP growth is better than growth recorded in the same quarter one year earlier. As expected economic growth in Q1-2016 was mainly supported by rising government investment (compared to Q1-2015). Household consumption remained relatively subdued at +4.94 percent (household consumption accounts for about 58 percent of total economic growth and therefore has a major influence on overall economic growth), while investment realization growth in Southeast Asia's largest economy slowed to 4.24 percent (y/y).
Government spending weakened severely when compared to Q4-2015. Government spending rose by only 2.93 percent (y/y) compared to a 7.31 percent (y/y) growth recorded in the preceding quarter. It is usual, however, that government spending accumulates at the year-end.
Indonesia's Quarterly GDP Growth 2009-2016 (annual % change):
|Year|| Quarter I
||Quarter II||Quarter III||Quarter IV||Full-Year|
Source: Statistics Indonesia (BPS)