It took a while – in fact a couple of months – but the Indonesian government has now finally become realistic about its forecast for economic growth in (the remainder of) 2020. Obviously, it had no other option after the country’s Q2-2020 gross domestic product (GDP) data had been released in August. These data showed a 5.32 percent year-on-year (y/y) contraction for Southeast Asia’s largest economy in Q2-2020.

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August is typically a special month for Indonesia because on the 17th of August the nation commemorates its Independence Day. Unfortunately, however, celebrations had to be quite sober this year as the novel coronavirus (COVID-19) pandemic is still spreading across the country.

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Statistics Indonesia (BPS) released its Q1-2020 gross domestic product (GDP) data for Indonesia on Tuesday (5 May 2020). According to the agency, the Indonesian economy expanded by 2.97 percent year-on-year (y/y) in the first quarter of 2020. The result is well below forecasts, and considering the real impact of the coronavirus crisis (COVID-19) on the Indonesian economy is to occur in the second quarter, we expect to see a deep red number in Q2-2020 (possibly extending into the following quarter).

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The economy of Indonesia expanded by 5.02 percent year-on-year (y/y) in the third quarter of 2019. Although the pace was in line with expectations, it does lead to a more gloomy outlook than we had before.

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In early September 2019 the World Bank released a report titled Global Economic Risks and Implications for Indonesia that paints a somewhat negative picture of Indonesia’s economic growth in the foreseeable future. The Washington-based institution noted that it expects Indonesia’s economic expansion to continue slowing up to (at least) 2022; from a realized growth pace of 5.2 percent year-on-year (y/y) in 2018 to 4.6 percent (y/y) in 2022.

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For the first time in several years, Indonesia Investments decided that it had to adjust its outlook for Indonesia’s economic growth. Since 2016, Indonesia’s modestly accelerating economic growth rate had been fully in line with our estimates.

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In line with our forecast, Indonesia’s economic growth continued to accelerate in 2018. Based on data from Statistics Indonesia (Badan Pusat Statistik, or BPS), which were released in early February 2019, the country’s gross domestic product (GDP) expanded 5.17 percent year-on-year (y/y) in full-year 2018, up from a growth rate of 5.07 percent in the preceding year.

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Danareksa, a fully state-owned financial institution in Indonesia, expects Indonesia's economic growth to slow in 2019 to the range of 5.1 - 5.2 percent year-on-year (y/y) from an estimated growth range of 5.2 - 5.3 percent (y/y) in 2018.

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Indonesia's Statistics Agency (BPS) announced that gross domestic product (GDP) of Indonesia expanded 5.06 percent year-on-year (y/y) in the first quarter of 2018. This figure is in line with our expectations. Over the past two years it had already become clear that the acceleration of economic growth in Indonesia goes at a very slow pace, a trend that can primarily be attributed to subdued household consumption.

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The Asian Development Bank (ADB) stated in its Asian Development Outlook (ADO) report, which was released on Wednesday (11/04), that it expects the Indonesian economy to expand by 5.3 percent year-on-year (y/y) in 2018 and 2019 on the back of rising investment and an improvement in household consumption.

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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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