Economic Growth Momentum Maintained in Indonesia - Bank Sentral Republik Indonesia
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December 12, 2019
Economic growth momentum in Indonesia was maintained in the second quarter of 2019 despite a backdrop of global economic moderation. The national economy expanded 5.05% (yoy) in the second quarter of 2019, relatively unchanged compared with the 5.07% (yoy) recorded in the previous period. The latest economic developments were influenced by increasing domestic demand against a declining external sector. Domestic demand has increased on the back of rising consumption and stable investment, although inventories have decreased. Meanwhile, the external sector was weighed down by decreasing exports as a corollary of global economic moderation and fresh fears concerning a potential furtherance of the trade war.
Solid domestic demand was the key driver of economic growth in the second quarter of 2019. Household consumption accelerated from 5.02% (yoy) in the first quarter of 2019 to 5.17% (yoy) in the reporting period, backed by controlled inflation and maintained consumer confidence. Government consumption also posted gains to 8.23% (yoy), while non-profit institutions serving households (NPISH) maintained strong consumption growth at 15.27% (yoy), induced predominantly by the impact of the recent general election. Stable investment growth was recorded at 5.01% (yoy) compared with 5.03% (yoy) in the previous period. In contrast, the external sector was characterised by export and import contractions, reaching 1.81% (yoy) and 6.73% (yoy) respectively. By sector, the key drivers of economic growth were the Primary Sector, led by Agriculture, Livestock, Forestry and Fisheries, as well as the Tertiary Sector, namely Other Services, Transportation & Trade and Information & Communication.
Bank Indonesia considers the latest economic developments in Indonesia during the second quarter of 2019 as positive despite the looming threat posed by global economic moderation. Moving forward, efforts to stimulate domestic demand, including investment, must be increased in order to mitigate the adverse impact of the global economic slowdown. Bank Indonesia will continue to strengthen coordination with the Government and other relevant authorities to maintain economic stability, stimulate domestic demand as well as boost exports, tourism and foreign capital inflows, including Foreign Direct Investment (FDI).
Jakarta, 5th August 2019
Onny Widjanarko
Executive Director 


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