BENGALURU (Reuters) – Indonesia’s economy likely expanded by 5.0% from July to September compared to the previous year, almost matching Q2 2024 growth, according to a Reuters poll. Strong consumer spending has supported this growth, despite weak export performance from Southeast Asia’s largest economy. Overall, the data underscores the resilience of Indonesia economy growth amid external challenges. #IndonesiaEconomyGrowth
For over a year, Indonesia has sustained around 5% economic growth, driven by resilient consumer demand amid high interest rates. However, exports from this resource-rich nation remain under pressure.
In a survey conducted from Oct. 28 to Nov. 1, 29 economists forecasted a 5.00% growth rate for Q3 2024, slightly below the 5.05% of the previous quarter.
“Domestic demand, especially private consumption, will remain the driving force behind GDP growth,” said Jeemin Bang, associate economist at Moody’s.
“Retail sales grew year-on-year throughout the third quarter, led by the major categories of food and automobiles.”
In August, retail sales increased by 5.8%, marking a four-month high.
However, quarter-on-quarter growth dropped to 1.6% in the July-September period, compared to 3.8% in Q2 2024, indicating that weaker demand from China impacted the commodity export-driven economy.
Exports slowed to a 6.44% growth rate in September, down from 7.13% in the previous month, as demand from China waned.
“Being a major commodity exporter, Indonesia is sensitive to changes in global demand conditions. Given China is Indonesia’s biggest export partner, its subdued performance will weigh on Indonesia’s exports,” added Jeemin.
A separate Reuters survey projected economic growth of about 5.0% for both this year and the next.
Bank Indonesia has estimated that growth in 2024 will range between 4.7% and 5.5%. #IndonesiaEconomyGrowth
Prospects for Continued Indonesia Economy Growth Amidst Global Challenges
Looking ahead, economists project continued stability in Indonesia economy growth, with steady domestic consumption supporting expansion. However, weaker demand from key trading partners, such as China, could influence exports. Still, Bank Indonesia expects annual growth to stay within a range of 4.7% to 5.5%, signaling confidence in Indonesia’s ongoing economic resilience.
