Economic Update Indonesia: Indonesian Economy Expands at a Rate of 5.05% (Y/Y) in Q2-2024
Indonesia’s economic growth in the second quarter of 2024 (Q2-2024) was good, although slightly below our projection of 5.1 percent year-on-year (y/y). According to the latest gross domestic product (GDP) data, which were released by Indonesia’s Statistical Agency (in Indonesian: Badan Pusat Statistik, BPS) on 5 August 2024, the Indonesian economy expanded by 5.05 percent (y/y) in Q2-2024.
Just like the previous quarter, we feel that this is a good growth rate for Indonesia amid quite some global uncertainty and geopolitical turmoil, most notably unrest in the Middle East, the Russo-Ukrainian war, high global interest rates, and lackluster global economic growth (led by Indonesia’s biggest trading partner, China). As usual it is the domestic market of Indonesia that allowed robust growth. With around 280 million inhabitants, who generally enjoy growing incomes, the country is home to a huge consumer force that drives economic activity and attracts direct investment.
In this article we are going to zoom in on all GDP components of Indonesia to give a comprehensive overview of the performance of the country’s economy in Q2-2024.
Q2-2024 Indonesian GDP in Current and Constant Prices
Based on current prices, Indonesian GDP reached a level of IDR 5,536.5 trillion (or approx. USD $340.71 billion using an IDR 16,250 per US dollar exchange rate) in Q2-2024. This is a 6.0 percent (y/y) increase from the same quarter one year earlier on the back of overall improving economic conditions.
Meanwhile, on a quarter-on-quarter (q/q) basis, current prices grew 4.7 percent in Q2-2024, partly thanks to the festive season as part of the Ramadan month and full Idul Fitri celebrations (together, the peak consumption season) fell in Q2-2024.
As usual, the biggest contributor to current prices is the manufacturing industry. On a y/y basis this industry rose 7.5 percent. However, on a q/q basis the manufacturing industry only increased by 0.5 percent as the manufacturing sector of Indonesia was already very active in Q1-2024 amid rising demand in the context of the approaching Ramadan month.
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