Indonesia Q2 GDP growth slows to 5.05%, lowest in 2 years

JAKARTA, NNA – The Indonesian economy posted the slowest quarterly growth in two years in the April-June period due to softer investments despite stronger consumption.

The Q2 GDP growth rate was in line with economists’ forecasts. Statistics Indonesia released gross domestic product data for the second quarter of 2019 on Monday.

Key points:

-- Southeast Asia’s largest economy expanded 5.05 percent from a year earlier in the three-month period, slowing from 5.07 percent in the first quarter. The reading was +5.27 percent in the April-June quarter of 2018.

-- Gross fixed capital formation, which makes up nearly a third of the country’s domestic output, grew 5.01 percent in Q2, compared to 5.03 percent in Q1. The reading has been in a downward trend since the latter half of 2017. It was 5.85 percent in the April-June period of last year.

-- Private consumption, which accounts for over half of Indonesian GDP, rose 5.17 percent on year in Q2, compared to the 5.01 percent in Q1, contributing 2.77 percentage points to the economic growth, compared to 2.76 percentage points the previous quarter, thanks mainly to the Eid al-Fitr holiday that marks the end of Ramadan. It grew 1.73 percent on quarter after remaining flat (+0.04 percent) in Q1 and rising 0.09 percent in the October-December of 2018.

-- Exports dropped 1.81 percent from a year earlier in Q2 while imports plunged 6.73 percent on year, leading net exports to contribute 0.98 percentage points to the quarterly economic growth.

-- On a quarterly, non-seasonably adjusted basis, the Indonesian economy grew 4.2 percent in the second quarter of 2019, led by high growth in the agricultural and fisheries sector (+13.8 percent).

Takeaway:

-- Statistics Indonesia head Suhariyanto said that the global economic slowdown weighed on the GDP growth figure in the second quarter of 2019, reflecting weakening global trade.

-- Economist Piter Abdullah told NNA in a phone interview that the Indonesian economy is not likely to achieve the government’s full-year growth rate target of 5.3 percent.

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