ALBAWABA – The gross domestic product (GDP) of Southeast Asia’s largest economy grew at the strongest rate in three quarters, despite lagging exports, as Indonesia GDP growth exceeded expectations, data by Statistics Indonesia showed Monday.
Indonesia GDP growth hit 5.17 percent year-on-year between April and June, having trumped expectations for the second quarter of the year 2023, according to Agence France-Presse (AFP).
The growth was driven by household spending, foreign and domestic investment and increased government spending, Statistics Indonesia official Edy Mahmud told reporters.
"During the second quarter of 2023, Indonesia's economic performance was supported by the increase of people's mobility and religious holidays that drive up people's consumption and production activities," Mahmud said.
He emphasised the resilience of Indonesia's economy emerging from the Covid-19 pandemic despite exports contracting for the first time since the last quarter of 2020. The contraction is owed in part to declining palm oil prices, AFP reported.
Exports fell 2.75 percent compared to the same quarter last year, figures showed.
Indonesia GDP growth last year reached 5.3 percent – the highest in nine years – on the back of soaring export prices and lifting of travel restrictions.
Jakarta’s target to maintain the same figure this year, however AFP’s analysts expect a slowdown in the coming months as record global commodity prices stoked by the Ukraine war start to ease.
"Lower commodity prices and weaker global demand weighed heavily on exports last quarter," Gareth Leather, senior Asia economist at Capital Economics, told AFP.
"Our forecast that global growth will struggle and that commodity prices will remain subdued suggests that exports will stay weak."
Leather predicted Indonesia's quarterly growth would fall to around 4.5 percent in the coming months while official figures indicate it will remain at around 5 percent.
