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Today's Headlines Gross Domestic Product

  • Government Trims Indonesia's GDP Growth Target in 2017 State Budget

    The government of Indonesia revised down its forecast for economic growth in 2017 to the range of 5.3 - 5.9 percent (y/y). On Friday (20/05) Indonesian Finance Minister Bambang Brodjonegoro informed parliament about the change in the growth outlook (related to the 2017 State Budget). Initially, the government projected Indonesia's 2017 GDP growth in the range of 5.5 - 5.9 percent (y/y). Brodjonegoro did not explain, however, why the government decided to revise down its GDP growth forecast in the 2017 State Budget.

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  • GDP Growth: Slowing Household Consumption in Indonesia is Worrisome

    Efforts to raise people's purchasing power and household consumption in Indonesia will be key to push for higher economic growth in 2016. According to the latest data from Statistics Indonesia (BPS), Indonesia's gross domestic product (GDP) growth reached 4.92 percent (y/y) in the first quarter of 2016. Although this result failed to meet analysts' projections (which generally stood around 5 percent y/y), it was higher than the 4.73 percent (y/y) economic growth pace that was posted in the same quarter one year earlier.

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  • Disappointing Figure; Indonesia's GDP Growth at 4.92% in Q1-2016

    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.

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  • GDP Update: What about Indonesia's Economic Growth in Q1-2016?

    Darmin Nasution, the Chief Economics Minister of Indonesia, said economic growth of Indonesia in the first quarter of 2016 may be somewhat curtailed as the (food) harvest season has shifted from March to April and May. The harvest season is important for the economy because it causes a multiplier effect. However, government-led infrastructure investment may still be able to push Indonesia's gross domestic product (GDP) growth higher in Q1-2016 compared with the 5.04 percent (y/y) growth of Q4-2015. Nasution said he expects a Q1-2016 GDP growth rate around 5.1 - 5.2 percent (y/y).

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  • World Bank Cuts Forecast for Indonesia's 2016 GDP Growth to 5.1%

    In its March 2016 Indonesia Economic Quarterly, titled "Private Investment is Essential", the World Bank cut its forecast for Indonesia's economic growth in 2016 to 5.1 percent year-on-year (y/y) from an earlier estimate of 5.3 percent (y/y). This downward revision was made due to weaker-than-expected global economic conditions, further weakening commodity prices, and limitations to Indonesian government spending brought about by a looming shortfall in tax revenue.

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  • Lower Fuel Prices Would Improve Indonesia's Purchasing Power

    Indonesia's economic growth in the first quarter of 2016 could reach 5 percent (or more) year-on-year provided that the government manages to optimize spending on infrastructure projects and improve people's purchasing power. Large drops in domestic car and motorcycle sales so far this year show that Indonesia's purchasing power remains bleak. Other indicators - such as cement and retail sales - are also not too strong. Firmanzah, economist at the Paramadina University, said the 0.09 percent (m/m) deflation that occurred in February could be a sign of further weakening purchasing power.

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  • Manufacturing Industry Indonesia Contributes 18.1% to GDP

    Indonesia's manufacturing industry was worth IDR 2,097.7 trillion (approx. USD $156 billion) in 2015, contributing 18.1 percent to the country's gross domestic product (GDP), up from 17.8 percent of GDP in the preceding year. However, this higher contribution of manufacturing to the economy is mainly caused by the declining roles of oil & gas, commodities, agriculture and mining within the Indonesian economy. These sectors have all seen their roles decline amid persistently low commodity prices.

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  • Official 2015 GDP Growth: Economy of Indonesia Expands 4.79%

    On Friday morning (05/02) Statistics Indonesia (BPS) announced that Indonesia's economy expanded 5.04 percent year-on-year in the fourth quarter of 2015, slightly higher than most analysts had been expecting. Full-year 2015 gross domestic product (GDP) growth was 4.79 percent (y/y). Although this figure is in line with expectations (which ranged between 4.70 and 4.80 percent), the growth pace still constitutes a six-year low for Indonesia, Southeast Asia's largest economy. Meanwhile, BPS also announced it had revised Q3-2015 GDP up from 4.73 (y/y) to 4.74 (y/y).

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  • Indonesia Posts Trade Deficit in December, Surplus in 2015

    Indonesia posted a trade deficit of USD $230 million in December 2015 as imports (USD $12.12 billion) exceeded exports (USD $11.89 billion), the second monthly trade deficit in 2015. Overall, the country's trade balance shows a surplus of USD $7.51 billion in 2015, significantly improving from the USD $2.2 billion trade deficit in the preceding year. But despite posting a good trade surplus in full-year 2015, a closer look at the data still reveals weak global and domestic conditions.

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  • What is the Impact of China’s Economic Slowdown on Indonesia?

    Economic turmoil that has pushed China’s growth to a 25-year low has a direct effect on Indonesia as China is the key trading partner of Indonesia. Concern about China’s economic slowdown (and the impact of this slowdown on the world economy) persist in 2016 as the country's Caixin/Markit manufacturing purchasing managers' index (PMI) contracted for the 10th straight month in December 2015 (at 48.2), while the services reading for December fell to a 17-month low (50.2).

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Latest Columns Gross Domestic Product

  • Analysis of Indonesia's 5.78% Economic Expansion in 2013

    On Wednesday (05/02), Statistics Indonesia (BPS) reported that the economy of Indonesia expanded 5.78 percent in 2013. This result implies that in 2013 Indonesia experienced the slowest pace of GDP growth since its 4.63 percentage growth in 2009. However, this slowing growth was basically self-inflicted as both the Indonesian government and central bank (Bank Indonesia) used various monetary and fiscal policies to curb economic expansion in order to tackle several financial issues.

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  • Indonesia's Chamber of Commerce: Economic Growth Will Slow in 2014

    This year, legislative and presidential elections will be held in Indonesia. Obviously, there is a strong relationship between the politics and economics of a country. Businessmen from various sectors of Indonesia's economy have already been voicing their views. As the umbrella organization of the Indonesian business chambers and associations, Kadin Indonesia recently shared its views about the elections as well. The institute believes that the 2014 elections will run smoothly because Indonesia's democracy has matured.

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  • Analysis: What Caused Indonesia's Slowing Economic Growth in 2013

    On Wednesday 5 February 2014, Statistics Indonesia (BPS, a non-departmental government institute) is expected to release Indonesia's official GDP growth figure for the year 2013. It is estimated that the outcome will be the lowest GDP growth figure since 2009 when Southeast Asia's largest economy grew 4.6 percent after feeling the impact of the global financial crisis. In 2013, again, Indonesia felt the negative influence of external troubles. And in combination with domestic factors, Indonesia's economic growth is expected to be around 5.7 percent in 2013.

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  • Debt of Indonesia Rising but Healthy with Public Debt-to-GDP Ratio at 28.7%

    Total government debt of Indonesia rose IDR 781 trillion (USD $64.5 billion) between 2009 and 2013 to IDR 2,371.39 trillion (USD $196 billion). This growing outstanding government debt is mainly caused by government loans to finance its State Budgets (APBN) as well as recent sharp rupiah depreciation (as part of this debt is denominated in foreign currencies). In the same period, Indonesia's per capita debt rose from IDR 6.8 million (USD $561) to IDR 8.6 million (USD $710), a 26.4 percent growth.

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  • Reduced Capital Injections Can Hurt Financial Stability Emerging Economies

    According to the World Bank, a sharp dismantling of capital injections by the central banks can lead to a 80 percent reduction of capital inflows into the emerging economies, including Indonesia. This can cause serious damage or even a crisis situation in an emerging market because capital flows to these countries are more triggered by global factors than domestic ones. The winding down of the Federal Reserve's bond-buying program (quantitative easing) has been gradual for now but if interest rates rise quickly it can hurt emerging economies.

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  • Indonesia’s External Debt Continues its Slowing Trend in October 2013

    Indonesia’s external debt growth continued to slow in October 2013. Debt grew 5.8 percent (yoy) to USD $262.4 billion compared to 8.6 percent (yoy) growth in the previous month. Slowing growth in external debt occurred both in the public and private sector. Public sector external debt position at the end of October 2013 grew 0.5 percent (yoy) to USD $125.8 billion compared to 2.1 percent (yoy) in September. Meanwhile, private sector external debt grew steadily at 11.1 percent (yoy) to USD $136.6 billion as compared to the previous month.

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  • Analysis of Indonesia’s 5.62% Economic Growth Rate (GDP) in Q3-2013

    Indonesia will most likely not meet its original GDP growth target of 6.3 percent (stipulated in the 2013 State Budget). Yesterday (06/11), it was announced by Statistics Indonesia that Indonesia’s GDP growth figure in the third quarter of 2013 was recorded at 5.62 percent (year-on-year, yoy), the weakest quarterly growth figure since 2009 when the global financial crisis impacted on Southeast Asia’s largest economy. In 2013, Indonesia feels the global impact again, in combination with domestic factors.

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