Southeast Asia's largest economy gains momentum through headwinds
Indonesia's economy grew 5.03% on the year in the January-March period, beating analysts' expectations despite pressure on exports from weaker commodity prices, the country's statistics agency said today.
The first-quarter growth of Southeast Asia's largest economy inched up from 5.01% in October-December, and was a touch higher than the 5.02% recorded in the corresponding period of 2022.
Ahead of the announcement, 23 economists polled by Reuters had given a median forecast of a 4.95% rise in gross domestic product. The January-March result matched Bank Indonesia's projection of slightly over 5%.
Indonesia, a top producer of commodities such as coal, palm oil and nickel, enjoyed a big export revenue boost last year as prices soared amid the Russia-Ukraine war and post-pandemic economic recovery. This year, commodity prices have come down to an extent, although they remain historically high.
Bank Indonesia Gov. Perry Warjiyo last month said that growth in April-June should pick up, thanks to typical increases in household consumption during the Islamic holy month of Ramadan, which ran through much of April, and the adjoining Eid holiday.
Warjiyo added that the economy is projected to expand this year near the upper end of the central bank's target range of 4.5% to 5.3%, or around 5.1%, citing strong private sector consumption and easing inflation. That would be slightly higher than the International Monetary Fund's latest projection of 5% growth for Indonesia in 2023.
Indonesia's GDP expanded 5.31% in 2022, the fastest pace in nine years.
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