Indonesia’s second quarter growth improves marginally

JAKARTA - At 5.3% year-on-year, Indonesia’s Q2 GDP growth has come in marginally higher than expected. Consumption activity provided support to overall growth and domestic demand in particular, compensating for the slowdown in investment.

ANZ Bank notes a sharp rise in inventories and their contribution to growth.

“Looking ahead, we expect growth to ease to around 5.1% for H2 2018,” ANZ says.

“The GDP data is unlikely to have a bearing on monetary policy, which is largely being driven by the need to manage IDR volatility. We continue to expect Bank Indonesia (BI) to hike its policy rate by 25bps to 5.50% next week. www.live.anz.com (ATI).