Indonesia's Economic Growth Slows Down to 5.81% in Q2-2013
Today (02/08), Indonesia's bureau for statistics announced that economic growth of Indonesia in the second quarter of 2013 reached 5.81 percent (YoY), which is the lowest growth rate since Q3-2010 and also lower than most analysts as well as the Indonesian government expected. The GDP figure reflects Indonesia's cooling economy. For the fourth consecutive quarter, the rate has weakened as the country has been under pressure: high inflation, a widening trade deficit and a weakening rupiah.
Economic Growth 2007-2013 (annual percentage change)
|Year|| Quarter I
||Quarter II||Quarter III||Quarter IV|
Source: Statistics Indonesia (BPS)
The government's target for GDP growth in 2013 is set at 6.3 percent in the State Budget (APBN) but it will be difficult to realize. Recently, Indonesia's central bank already downgraded its forecast for economic growth from the 6.2 - 6.6 percent range to 5.8 - 6.2 percent. Various other institutions, including the IMF and Credit Suisse, have also lowered their forecast for Indonesia's economic growth to below six percent.
Global demand for Indonesia's commodities is still weak and in combination with strong domestic demand for foreign products (particularly oil), it has resulted in a trade deficit of USD $3.31 billion in the first half of 2013. The country's total exports amounted to USD $91.05 billion in Semester I-2013, while imports stood at USD $94.36 billion. The trade deficit is expected to continue at least until the end of this year.
Inflation accelerated significantly to 8.61 percent (YoY) in July 2013.