Indonesia: 3Q21 GDP growth at 4.3% y/y, future headwinds signalled

  • Indonesia expects rising exports and a recovery in household consumption to result in economic growth of 4.3% in 3Q21, refining an earlier forecast
  • Southeast Asia’s largest economy grew 7.07% on 2Q21 but a new wave of COVID-19 infections in Jul 21, triggered by the spread of the Delta variant, and measures to control the outbreak have hurt its economic recovery.
  • 3Q21 data is due to be released on 5 Nov 21.
  • Referring to the new 3Q21 as an upward revision, Finance Minister Sri Mulyani Indrawati said indicators for domestic demand had improved since the second week of Aug 21, when anti-virus measures began to be relaxed.
  • Exports from Indonesia, the world’s biggest exporter of thermal coal and palm oil, have also surged amid record high prices.
  • The minister also gave a new official forecast for 2021 full-year growth of 4%, compared with a previous forecast of 3.7% to 4.5%.
  • “In 4Q21, there remains potential for a rebound, although at a more normal rate. But the rebalancing of economic activities in China, the United States and the European Union could affect us in 4Q21 and in 2022,” Sri Mulyani said.
  • She listed the possibility of tapering in the United States and the European Union, a potential slowdown in China’s economic growth and rising inflation globally, among other uncertainties, as potential headwinds to Indonesia’s recovery.

External Link :