JAKARTA (TheInsiderStories) – The Indonesian economy expanded by 5.06 per cent year-on year in the first quarter of 2018, following a 5.01 per cent growth a year ago.
Robust international trade is cited as the main contributor to the GDP growth, driven to higher oil price.
Indonesia’s GDP growth averaged 5.28 per cent from 2000 until 2017, reaching an all time high of 7.16 per cent in the fourth quarter of 2004 and a record low of 1.56 per cent in the fourth quarter of 2001.
On the expenditure side, fixed investment jumped 7.95 per cent, after a 4.77 per cent growth in the previous period.
However, the continuation of subdued household consumption in Southeast Asia’s biggest economy is causing disappointing figure. In Q1 2018, household consumption only rose to 4.95 percent, from 4.93 percent, or still below 5 per cent. Household consumption accounts for about 56 percent of the nation’s total economic growth.
Meanwhile, government spending went up 2.73 percent, driven by the development of infrastructure and social spending.
Indonesia’s exports reached $15.58 billion, a 6.14 percent year-on-year (yoy) increase, while the imports reached $14.49 billion, a 9.07 percent yoy increase.
In terms of production, Information and Communication recorded the highest growth at 8.69 percent; followed by Transportation and Warehousing at 8.59 percent; Other Services at 8.42 percent; and Services Company at 8.04 percent.
The government targets 2018 gross domestic product growth of 5.4 per cent, while Bank Indonesia estimated a growth between 5.1 per cent and 5.5 per cent.
In the next year, government has set an ambitious target of seeing domestic economy expanding by 5.4-5.8 per cent in 2019, the year that will be the end of its term and is also the presidential election year.
The 5.4-5.8 percent growth projection is backed by the government’s optimism that a political year is unlikely to slow down investment, while household spending is expected to accelerate, amid possible favourable domestic tailwinds and potentially positive external factors.