MACROECONOMIC ANALYSIS SERIES: Indonesia Economic Outlook Q3-2022

The auspicious progress in the domestic public health situation has transpired into a solid GDP growth of 5.01% (y.o.y) in Q1-2022. In the first half of 2022, Indonesia was in an advantageous position to face the latest global economic turmoil. Thanks to the combination of good policy and good luck, first, a rapid buildup of economic activity. Major economic sectors, such as manufacturing, wholesale & retail trade, construction, and ICT, contributing to around 50% of GDP, recorded a rising growth in Q1-2022. In addition, sectors relied on physical activities, such as transportation & storage and accommodation & FnB showed substantial improvement due to the relaxation of social restriction policies. The economic recovery was also reflected in household consumption with 4.34% (y.o.y) growth in Q1-2022, higher compared to the last three months of 2021. Household consumption will most likely grow greater in Q2-2022 due to the momentum of Ramadhan and Eid Al-Fitr. At the same time, total credit continued to accelerate along with demand recovery. Moreover, all other expenditure components, investment and exports, also recorded positive growths in the same period.

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