The Indonesian government revised down its target for the country's manufacturing growth in 2014 to 6 percent year-on-year (yoy) from 6.4 to 6.8 percent (yoy) previously. Main reason for the downgrade was the lower than expected GDP growth result in the first quarter of 2014. Earlier this week, Statistics Indonesia announced that the Indonesian economy expanded 5.21 percent in Q1-2014, the slowest quarterly growth pace since the fourth quarter of 2009. Last year, Indonesia's manufacturing sector grew 6.19 percent (yoy).

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The Asian Development Bank (ADB) expects Indonesia's economic growth this year to slow slightly compared to the 5.78 percent growth rate recorded in 2013. ADB's Country Director for Indonesia, Adrian Ruthenberg, said that GDP growth of Southeast Asia's largest economy is expected to slow to 5.7 percent in 2014 but will accelerate to 6 percent in 2015. The ADB's forecast is based on the assumption that Indonesia's legislative and presidential elections will run smoothly as well as continued government effort to improve the investment climate.

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According to the Asian Development Bank's latest annual Asian Development Outlook (which provides an analysis of economic performance for the past year and near future), developing Asia is expected to extend its steady growth. The region’s growth is projected to edge up from 6.1 percent in 2013 to 6.2 percent in 2014 and 6.4 percent in 2015. Moderating growth in China (PRC) as its economy adjusts to more balanced growth will offset to some extent the stronger demand expected from the industrial countries as their economies recover.

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Singapore-based DBS Bank predicts that household consumption in Indonesia will grow 5.6 percent (yoy) in the first semester of 2014, which is slightly higher than the growth recorded in the last three years. Gundy Cahyadi, economist at the DBS Bank, said that the main reason for this accelerated household consumption is the legislative election that will be held on 9 April 2014. Traditionally, consumption peaks in times of elections. Household consumption is one of the main pillars of Indonesia's economic growth, accounting for 55 percent of GDP.

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Contrary to the World Bank and Bank Indonesia that both revised down forecasts for economic growth of Indonesia in 2014, the government of Indonesia is still convinced that it can meet the target of 5.8 to 6.0 percent as has been set in the 2014 State Budget (APBN 2014). In its most recent Indonesia Economic Quarterly report, the World Bank said it expects Indonesia’s economic growth to reach 5.3 percent in 2014, while Bank Indonesia targets a 5.7 percentage growth rate.

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The central bank of Indonesia (Bank Indonesia) lowered its forecast for growth of Southeast Asia's largest economy in 2014 from the range of 5.8 - 6.2 percent to 5.5 - 5.9 percent as expansion of domestic consumption and exports are less robust than previously estimated. As such, Bank Indonesia implied that economic expansion of Indonesia will slow down further. Starting from 2011, gross domestic product (GDP) growth of Indonesia has declined steadily from 6.5 percent to 5.8 percent in 2013.

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According to a recent survey of Schroder Investment Management Indonesia, subsidiary of the British multinational asset management firm and a leading independent international asset management and private banking group, Indonesian investors feel more confident to invest in Indonesia in 2014. Director of Schroder Indonesia Michael Tjoajadi stated that confidence of Indonesian investors has increased due to improving economic conditions and the long-term prospects of Southeast Asia's largest economy.

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Indonesia Investments has updated its overview of Indonesia's gross domestic product (GDP) in the Macroeconomic Indicators section. Although Indonesia's GDP growth has slowed in the past two years amid global financial troubles and uncertainty in combination with a number of internal financial weaknesses (the country's wide current account deficit, high inflation and higher interest rate environment), it can still be labeled robust at 5.78 percent in 2013. This overview includes a discussion on GDP per capita and income distribution.

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Following a meeting of the G20 Finance Ministers, Indonesia's Finance Minister Chatib Basri said in an interview that this year's economic growth in Indonesia may slow to the lowest level since 2009 as the government and central bank implemented various measures aimed at curbing GDP growth in order to safeguard financial stability. Basri said that GDP growth in the range of 5.5 to 5.8 percent is a more realistic forecast. Slower growth will help to realize the government's aim to reduce the current account deficit to between 2.0 and 2.5 percent of GDP.

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Indonesia's Ministry of National Development Planning (Bappenas) is optimistic that economic expansion in Southeast Asia's largest economy will exceed the 6 percent mark in 2014, thus outpacing growth last year which reached 5.78 percent (yoy). According to Minister Armida S Alisjahbana, two factors will contribute positively to Indonesia's GDP growth in 2014. These are the legislative and presidential elections (scheduled for April and July 2014) as well as the improvement of Indonesia's trade balance.

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What came as a surprise to us is that the Asian Development Bank (ADB) decided to raise its projection for Indonesia’s economic growth in full 2022 from 5.0 percent year-on-year (y/y) to 5.2 percent (y/y) in July 2022. This decision was substantiated in its Asian Development Outlook 2022 Supplement entitled Recovery Faces Diverse Challenges.

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Despite the ongoing challenges (that mainly originate from abroad), there is reason to be optimistic about Indonesia’s economic growth in 2022 as the COVID-19 threat has eased.

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On 7 February 2022, Indonesia’s Statistical Agency (Badan Pusat Statistik, or BPS) announced the latest gross domestic product (GDP) data of Indonesia, covering the final quarter of 2021.

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There are reasons to be optimistic about Indonesia’s economic activity in the fourth quarter of 2021. Obviously, the underlying reason being that new confirmed COVID-19 infections have not been far from zero in Indonesia throughout the final quarter of the year. As a consequence, the government of Indonesia did not need to impose tough restrictions, hence economic activity is allowed to blossom.

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The economic rebound in the second quarter of 2021 – with a +7.07 percent year-on-year (y/y) growth pace – was great for Indonesia, albeit it is obviously related to the ‘low base effect’ (as Indonesia had hit its rock bottom in the same quarter one year earlier). But what about the future, or more precisely: Q3-2021?

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On 05 August 2020, Statistics Indonesia (BPS) released Indonesia’s gross domestic product (GDP) data for the second quarter of 2020. These data, which were highly anticipated among analysts and policymakers, are crucial to comprehend how – and to what extend – the self-imposed social and business restrictions (made in response to the COVID-19 pandemic) have impacted on the Indonesian economy.

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The most recent published outlooks for global economic growth and global trade are more pessimistic than their earlier versions, with the main reason being that there is no quick solution to the coronavirus (COVID-19) crisis. On the contrary, there is a high degree of uncertainty about when business can resume as usual. And, the closer we get to 2021, the less rosy outlooks are becoming for next year.

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On 5 May 2020 Statistics Indonesia (Badan Pusat Statistik, BPS), a non-departmental government agency, released the first quarter gross domestic product (GDP) data of Indonesia for the year 2020. These data were highly anticipated as policymakers, analysts, and stakeholders are particularly interested in finding out to what extent damage has been done to the Indonesian economy by the self-imposed restrictions.

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In mid-April 2020 the International Monetary Fund (IMF) released its latest ‘World Economic Outlook’ report. It is in fact not a complete report. Considering the global economy has changed dramatically over the past months, the IMF’s previous update of the World Economic Outlook (released in January 2020) simply had no validity anymore, and therefore the IMF released one new chapter in mid-April 2020 (with the full report set to follow in May 2020).

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As expected, Indonesia’s full-year 2019 economic growth came in well below the central government’s 5.3 percent year-on-year (y/y) growth target. Based on the data that were released by Statistics Indonesia (Badan Pusat Statistik, BPS) in early February 2020, the Indonesian economy expanded at a pace of 5.02 percent (y/y) in 2019.

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