Indonesia’s Q3 GDP rises 4.95% from a year ago, slightly slower than Q2
2024.11.05 06:15
By Stefanno Sulaiman and Fransiska Nangoy
JAKARTA (Reuters) – Indonesia’s gross domestic product in the third quarter increased 4.95% from a year earlier, its slowest pace in a year, data from the statistics bureau showed on Tuesday, as household consumption showed softer growth.
The third-quarter result came slightly below annual growth of 5% expected by analysts polled by Reuters and compared with an increase of 5.05% in the second quarter.
On a quarterly, non-seasonally adjusted basis, GDP grew 1.50%, compared with a forecast of 1.59%.
Household consumption, which makes up about half of Indonesia’s GDP, grew 4.91% annually in the third quarter, off the previous quarter’s growth of 4.93%, amid slower spending for goods such as clothing and housing, Amalia Widyasanti, the acting head of Statistics Indonesia, told reporters.
Investment grew 5.15% year-on-year, its fastest pace in a year, supported by investment in the new capital city and other infrastructure projects, she added. Government spending and exports also expanded more.
“Third-quarter growth numbers met our expectations as investment growth and pick-up in exports compensated for soft household consumption,” said DBS Bank economist Radhika Rao.
Full-year GDP growth is expected at around 5%, said Airlangga Hartarto, the chief economic minister.
“We will continue to support household consumption and also investment,” Airlangga told reporters. “We hoped we could maintain the economic growth until year-end.”
Existing government incentives, such as a tax break on certain property sales, are expected to support consumption, he said, adding that the government was also formulating a policy to help labour-intensive industries avoid layoffs.
In September, Bank Indonesia cut rates to support the economy, and then held steady in October as rising tension in the Middle East renewed pressure on the rupiah.
The third-quarter GDP reading backs DBS Bank’s forecast for a further rate cut by the central bank this quarter, assuming rupiah stability, Rao added.
The rupiah closed 0.13% stronger on Tuesday, rebounding off its weakest level since August, hit earlier in the day.
