UBS Revises up its GDP Estimate for Indonesia due to Stronger US Demand
Global financial services company UBS has revised up Indonesia's gross domestic product (GDP) number as it expects the country to benefit from increased exports to the United States. The Switzerland-based company predicts that Indonesia's economy will grow by 6.3 percent, instead of the previous estimate of 6.0 percent. Recently improved economic growth in the USA is cited as the engine of growth for Indonesian exports later this year.
Last year, the US economy grew by 2.1 percent. This number is expected to increase to 2.3 percent in 2013 and 3.0 percent in 2014. Indonesia's economy grew 6.2 percent in 2012, down from 6.5 percent in 2011 mainly due to weak global demand that impacted on Indonesia's exports. The country's exports fell 6.6 percent last year, resulting in a trade deficit starting from April 2012.
About 13 percent of Indonesia's total exports are shipped to the US. As such, US demand has a big influence on export numbers of Indonesia.