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Indonesia's economy expands 5.44% in 2nd quarter, exceeding expectation

Jakarta Globe - August 5, 2022

Jakarta – Indonesia's economy has accelerated in the second quarter against a gloomy global economic backdrop, thanks to windfall revenue from rising prices of its commodity exports and strong household consumption during the Islamic festive season as the number of Covid-19 cases receded.

The largest economy in Southeast Asia was 5.44 percent in the second quarter this year from the same period last year, accelerating from 5.01 percent in the first quarter, the Central Statistics Agency (BPS) announced Friday.

The latest growth reading exceeded the Ministry of Finance's expectation of 5.3 percent.

"In the midst of global inflationary pressures and the threat of a recession, the Indonesian economy grew at an impressive [pace]," the agency wrote in its report.

"That reinforces the trend of Indonesia's economic recovery continues and is getting stronger," the agency said.

BPS noted Indonesia's export grew 19.7 percent, accelerating from 16.2 percent in the first quarter.

"Globally, world supply chain disruptions have an impact on the rising prices of Indonesia's leading commodities and provide a windfall on export performance," BPS said.

Household consumption, which still accounts for more than half of the economy, expanded 5.51 percent.

"Domestically, the easing of population mobility and the moment of Idul Fitri encourage consumption expansion community as well as a stimulus to increase supply," the agency noted.

Investment increased 3.07 percent, slowing down from the previous quarter of 4.04 percent, BPS data showed.

Regarding the supply side, manufacturing, transportation and warehousing, and trading sectors contributed the most to Indonesia's gross domestic product (GDP) growth in the second quarter. Combined, the sectors were responsible for about 38.3 percent of the growth.

Java remained the largest contributor to the GDP, with a share of 56.5 percent. But, in terms of growth, Maluku and Papua provinces expanded the fastest last quarter, thanks to expansion in their mining and quarrying sectors.

Source: https://jakartaglobe.id/business/indonesias-economy-expands-544-in-2nd-quarter-exceeding-expectatio