- Second-quarter GDP surprises with 5.44% y-o-y growth, as Indonesia gains from high global commodity prices and strong consumer spending in Ramadan and Eid al-Fitr
- The Q2 growth trumped a 5.17% expansion forecast by 22 economists polled by Reuters
- Indonesians are grappling with inflation its fastest pace in seven years, hitting 4.94% in July, higher than expected and well above the central bank’s target range of 2% to 4%
Indonesia’s second-quarter gross domestic product grew 5.44% year-on-year, beating market expectations, as the economy enjoyed an export boom driven by high global commodity prices and strong consumer spending during the Muslim holy month of Ramadan and the Eid al-Fitr holiday.
The growth rate also outperformed the 5.01% expansion in the previous quarter, Statistics Indonesia said on August 5.
Reuters reported that 22 economists it had surveyed had estimated GDP growth of 5.17% for the second quarter.
The news agency reported that, unadjusted for seasonal factors, gross domestic product was 3.72% larger than in the previous quarter, compared with the poll’s forecast of 3.44%.
Nikkei Asia reported that exports and strong consumer spending during Ramadan and the Eid al-Fitr holiday boosted Indonesia’s GDP to 5.44% in the April-to-June quarter.
Growth in Southeast Asia’s largest economy held steady in the second quarter, the newspaper said, citing data released by Statistics Indonesia.
Private consumption, which makes up more than half of Indonesia’s GDP, rose 5.51% in the second quarter compared with the same period in 2021, while exports increased 19.74%.
“Amidst global pressures, the economies of Indonesia’s trading partners continued to grow, with Indonesia earning windfalls from its international trade,” Statistics Indonesia head Margo Yuwono said in a news briefing on Friday.
He added that the growth in the quarter was aided by improvements in COVID-19 conditions, which helped accelerate consumption and production.
Yuwono also mentioned that foreign tourism grew significantly, with room occupancy rates at hotels increasing. The government in May removed a requirement for foreign travellers to present negative PCR tests when they arrive at Indonesian airports.
With commodity prices rising around the world, the resource-rich nation has been enjoying an export boom.
Indonesia’s Central Bank Gov. Perry Warjiyo said on Monday that economic growth in the second and third quarters will continue, “supported by good export performance.”
“Economic growth in Q2 and Q3 will continue to rise following Ramadan, with improved community mobility and encouraging private consumption,” Warjiyo said.
Indonesians, meanwhile, are facing inflation that has accelerated to its fastest pace in seven years, hitting 4.94% in July. It is higher than expected and well above the central bank’s target range of 2% to 4%.