- Indonesian economy grew by 5.17% y-y in 2Q23, higher than market expectations of 5.0%. This is also outperforming our initial forecasts of only ±4.9% for 2Q2023. But, there are palpable signals of GDP slowdown, with the relatively weak economic performance likely felt in the second half this year on potential pullback in consumption, investment, and net exports. We revise our number for FY23 GDP growth forecast of 4.8% – 4.9% to 4.9% – 5.0%
- Household consumption rebounded by expanding 5.2% y-y, following two quarters of only 4% growth. Investments also grew to 4.6% in 2Q23 from only 2.1% in the previous quarter, likely due to the low base effects. The strong GDP numbers are likely to dissuade policymakers notably Bank Indonesia to loosen monetary policy
Toward Stronger Financial Industry in Indonesia