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Indonesia GDP growth beats forecast in Q2, fastest in a year

CNA – Indonesia’s economic growth accelerated in the April to June quarter amid an export boom driven by rising commodity prices, official data showed yesterday, but monetary tightening, rising inflation and a global recession risk threaten the outlook.

Second-quarter gross domestic product (GDP) was up 5.44 per cent on a year earlier, showing the fastest growth rate in a year, according to Statistics Indonesia data. That beat the median forecast of a 5.17-per-cent rise in a poll and the first quarter’s 5.01-per-cent annual growth.

Exports expanded nearly 20 per cent on a yearly basis, picking up pace from 16.22 per cent in the previous quarter, which the statistics bureau called “impressive”.

Indonesia is a major exporter of palm oil, coal, nickel and tin. With the war in Ukraine fuelling an upward cycle in commodity prices this year, the country has seen exports soaring, shoring up its economic resilience.

Household consumption, which accounts for over half of GDP, recovered further after the lifting of COVID-19 restrictions, with the Aidilfitri celebration in May providing a further boost.

However, investment slowed.

By sector, food and beverages, mining, construction and transport and warehousing industries saw faster expansion than in the previous period. Prices of palm oil have plunged in recent months, but Indonesian coal prices are still hovering around record highs due to strong demand from such markets as Europe.

Already, Indonesia’s central bank said last month the rise in full-year GDP for 2022 would be at the lower end of the range of 4.5 per cent to 5.3 per cent. It previously forecast growth in the middle of that range.

People walking along a pedestrian bridge during rush hour at a business district in Jakarta, Indonesia. PHOTO: CNA
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