Statistics Indonesia (BPS) announced today (05/08) that the Indonesian economy grew 4.67 percent (y/y) in the second quarter of 2015, the slowest pace since 2009. However, the result was in line with expectation. Most analysts assumed that economic growth would continue to slow as there has been no rebound in global commodity prices, interest rates remained high, people’s purchasing power weakened, government spending remained problematic, companies Q2-2015 earnings reports were not too good, and manufacturing contracted.

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The pace of economic growth of Indonesia is expected to remain below five percent year-on-year (y/y) in the second quarter of 2015 according to Reuters poll involving 22 analysts. In fact, the poll shows that further slowing economic growth is expected. In the first quarter of 2015, Indonesia’s economic growth came at 4.71 percent (y/y), the weakest growth pace in six years. According to the poll, analysts see a gross domestic product (GDP) growth rate of 4.61 percent (y/y) in the second quarter of 2015.

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The Asian Development Bank (ADB) announced that it cut its 2015 and 2016 economic growth forecasts for both China and other developing Asian countries due to the persistent economic slowdown in the world’s second-largest economy. China’s economic expansion is projected to reach 7 percent (y/y) in 2015 and 6.8 percent (y/y) in 2016. Both these outlooks were down 0.2 percentage point from the ADB’s previous projection. Due to the size of China’s economy, economic slowing will drag down growth in the whole Asian region.

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The International Monetary Fund (IMF) cut its forecast for global economic growth in 2015 to 3.3 percent (y/y), from 3.5 percent (y/y) previously, as the harsh winter impacted on the US economy and drags down global growth accordingly. In the first quarter of 2015, the US economy contracted 0.2 percent (y/y). Moreover, turmoil in Greece and China cause great volatility on international financial markets, the Washington-based institution said in an update to its World Economic Outlook (WEO) on Thursday (09/07).

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The World Bank cut its forecast for economic growth in Indonesia in 2015 from 5.2 percent year-on-year (y/y) to 4.7 percent (y/y) as private consumption, which accounts for about 55 percent of total economic growth in Indonesia, is estimated to weaken further in the second half of 2015 while government spending has been lower than expected (causing subdued fixed investment). Furthermore, persistent low commodity prices and tighter credit conditions provide further pressures that led to the extreme downward revision.

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The Asian Development Bank (ADB) has revised its economic growth forecast for Indonesia in 2015 from 5.2 percent year-on-year (y/y) to 5 percent (y/y). During a press conference on Tuesday (07/07) in Jakarta, Edimon Ginting, Deputy Country Director for Indonesia of the Philippines-based ADB, said that there are three reasons that explain why the ADB has become less optimistic about Indonesia’s gross domestic product (GDP) growth in 2015. Last year, Indonesia’s economic growth slowed to a five-year low of 5.02 percent (y/y).

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The Indonesian government revised its 2015 economic growth target. Sofyan Djalil, Indonesian Coordinating Minister for Economic Affairs, stated on Friday (03/07) that the government’s previous target was unrealistically high at 5.8 percent (y/y) given the sluggish international and domestic economic context. The government revised down the GDP growth target of 2015 to 5.2 percent (y/y). Djalil said that the global economy is forecast to grow 2.9 percent (y/y) in 2015 from an earlier estimate of 3.5 percent (y/y).

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Indonesian authorities, i.e. the government and central bank (Bank Indonesia), announced or revised several macroeconomic assumptions for 2015 and 2016. Perhaps most importantly, Indonesia’s 2016 economic growth assumption has been revised down to the range of 5.5 - 6.0 percent (y/y), down from its previous assumption of 5.8 - 6.2 percent (y/y). Indonesian Finance Minister Bambang Brodjonegoro also stated that the government will assume the rupiah at IDR 13,000 - 13,400 per US dollar for the 2016 calendar year.

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Several international institutions revised down their outlook for economic growth of Indonesia in 2015 as foreign investors have been somewhat disappointed with the performance of the new Indonesian government, while the global economic picture remains far from rosy. Goldman Sachs, JPMorgan Chase, Credit Suisse and Nomura Holdings have all slashed Indonesia’s economic growth forecast this year to below the five percent (year-on-year) mark. Last year Indonesia’s economic growth touched a five-year low of 5.02 percent (y/y).

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The central bank of Indonesia (Bank Indonesia) revised down its economic growth outlook for Indonesia in 2015. In a meeting with the House of Representatives’ Budget Committee, Bank Indonesia Governor Agus Martowardojo said that Indonesia’s GDP growth is expected to reach 5.1 percent (y/y) this year. Previously, the central bank projected economic growth in the range of 5.4 to 5.8 percent (y/y). However, after seeing weak growth in the first quarter (4.71 percent y/y), projections had to be revised.

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Given a variety of recent events, Indonesia has seemingly entered a liminal phase in its development trajectory, suggesting that its economic vulnerability will be tested in new ways. The present circumstances should be understood as a particular test for the ability of policy initiatives to temper the effects of perturbing exogenous factors and demand shocks to the overall economy.

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In early May 2019 Indonesia’s statistics agency (in Indonesian: Badan Pusat Statistik, or BPS) announced that the nation’s economic growth pace was recorded at 5.07 percent year-on-year (y/y) in the first quarter of 2019.

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In early November 2018 the Central Statistics Bureau (BPS) announced that Indonesia’s gross domestic product (GDP) growth reached 5.17 percent year-on-year (y/y) in the third quarter of 2018. Although it means a slowdown from the 5.27 percent (y/y) growth pace in the preceding quarter, the Q3-2018 GDP growth rate actually slightly exceeded our expectations.

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It was a welcome surprise when Indonesia’s Statistics Agency (in Indonesian: Badan Pusat Statistik, or BPS) announced in early August that the country’s gross domestic product (GDP) expanded 5.27 percent year-on-year (y/y) in the second quarter of 2018.

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Although overshadowed by the news of the devastating earthquake in Lombok, Statistics Indonesia (BPS) released the official Q2-2018 gross domestic product (GDP) growth figure of Indonesia earlier today. The economy of Indonesia expanded 5.27 percent year-on-year (y/y) in the second quarter of 2018. This growth pace exceeds our expectations although it is not enough to necessitate a revision to our full-year 2018 GDP growth forecast of 5.2 percent (y/y).

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There are doubts whether Indonesia's gross domestic product (GDP) growth can reach 5.2 percent year-on-year (y/y) in full-year 2018 as Indonesia is experiencing a couple of major challenges. Challenges include the global trade war, the fragile rupiah, Bank Indonesia's higher benchmark interest rate, the current account deficit, and political tensions ahead of the 2019 legislative and presidential elections. Currently, Indonesia Investments' forecast for Indonesia's economic growth is set at 5.2 percent (y/y) in 2018.

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The World Bank revised down its economic growth projection for Indonesia from 5.3 percent year-on-year (y/y) to 5.2 percent (y/y) for full-year 2018 amid the complex external environment: tightening monetary conditions, a potential global trade war, financial volatility, and geopolitical concerns. Such external factors put pressure on Indonesia's export performance, hence on domestic economic growth.

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In full-year 2017 the Indonesian economy expanded 5.07 percent year-on-year (y/y). Indonesia's Statistics Agency (BPS) announced on Monday morning (05/02) that the nation's gross domestic product (GDP) growth reached 5.19 percent (y/y) in the fourth quarter of 2017. These figures show a mixed picture.

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The central bank of Indonesia (Bank Indonesia) said it will revise its outlook for Indonesia's economic growth in full-year 2017 after the Q3-2017 GDP growth figure - released at the start of the week - was well below expectations. Previously, Bank Indonesia set its economic growth target for Indonesia in 2017 in the range of 5.0 - 5.4 percent year-on-year (y/y).

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On Monday (06/11) Indonesia's Statistics Agency (BPS) is scheduled to release Indonesia's third quarter GDP data, important information that is closely followed by investors and analysts. While most analysts expect to see accelerated economic growth in the third quarter, others remain skeptical as Indonesia's gross domestic product was disappointing in the first two quarters of the year amid bleak domestic consumption.

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