MACROECONOMIC ANALYSIS SERIES: Indonesia Economic Outlook Q1-2023

Despite the economic bleakness in the global economy following serious disruptions of prolonged Covid-19 spread, geopolitical tension, rising food and energy prices, and overheating inflation throughout 2022, Indonesia has managed to persistently grow at 5.72% (y.o.y) in Q3-2022. The figure is the highest level in the last ten years and marks its third consecutive quarter having a growth rate higher than expectations. The growth was mainly supported by the solid demand and production activity as Indonesia managed to channel the commodity windfall profit to increase the budget and delay the fuel price hike. Moreover, the relatively low growth in the same period previous year has also contributed to the higher-than-expected growth in Q3-2022. Manufacturing industry as the biggest sector to contribute to GDP recorded a significant growth increase from 4.01% (y.o.y) in Q2-2022 to 4.83% (y.o.y) in Q3-2022. From expenditure side, the robust household consumption of 5.39% (y.o.y) and investment growth of 4.96% (y.o.y) has played an important role in boosting economic growth.

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