Amid concerns over global economic activity and reduced cross-border trade, Indonesia has posted another solid GDP reading, setting the country apart from many others ahead of the Group of Twenty (G20) Summit to be hosted in Bali this month. Indonesia’s GDP was up 5.72 percent year-on-year (YoY) in the third quarter, Statistics Indonesia reported in an online press briefing on Monday. That exceeds the 5.44 percent YoY growth rate recorded in the second quarter and 5.01 percent YoY logged in the first. The domestic economy is benefiting this year from relaxed pandemic restrictions at home and higher prices for key export commodities in global markets.
The figures presented on Monday are lower than forecasts from state-owned Bank Mandiri and financial research firm Moody’s Analytics, which had predicted third-quarter GDP growth of 6 percent YoY and 6.01 percent YoY, respectively. Compared to the second quarter, Indonesia’s GDP was up 1.81 percent, which is lower than Bank Mandiri’s forecast of 2.09 percent and marks a slowdown from the quarterly growth of 3.72 percent registered in the second quarter. Other economic indicators also pointed up in the third quarter, such as a trade surplus that increased 12.58 percent YoY, retail sales that rose 5.52 percent YoY, and income tax receipts that were up 26.10 percent YoY.
“The pattern of the preceding years shows that quarterly growth in the third quarter is always slower than in the second quarter because of seasonal factors. We are an open economy, hence very dependent on major trading partners,” BPS head Margo Yuwono said on Monday.
Indonesia’s latest GDP report comes after several other major economies also posted improved growth for the same quarter. Household spending, which currently accounts for 50.38 percent of the economy, was up 5.39 percent YoY in the third quarter. Investment, also known as gross fixed capital formation, was a drag on overall GDP growth as it was up just 4.96 percent YoY. International trade contributed to annual economic growth due to stellar exports of coal, processed oil, and natural gas, which grew by 21.64 percent YoY. However, imports outpaced exports with a growth of 22.98 percent YoY, driven by increased industrial imports of capital goods and raw materials. Government spending, meanwhile, continued to decline, dropping 2.88 percent YoY due to lower state budget spending on goods and services. Transportation and warehousing remained the sector logging the highest growth with 25.81 percent YoY, followed by hospitality services with 17.83 percent YoY. Manufacturing sector production, meanwhile, grew 4.83 percent YoY, while mining expanded only 3.22 percent YoY and agricultural output rose at a lackluster 1.65 percent YoY.
November 7, 2022, The Jakarta Post
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