Indonesia GDP growth steady in Q4, likely to ease in 2019

February 6, 2019

JAKARTA -   Indonesia's GDP expanded by 5.18% y/y in Q4, broadly unchanged from the 5.17% pace seen in Q3. For 2018 as a whole, growth came in at 5.17%, marking the third straight year of faster growth.

While private consumption growth picked up, investment and Government spending eased. Both export and import growth also slowed, though a sharper pullback in import growth meant that net trade was a smaller drag on headline growth. Inventories also provided a boost to overall growth.

ANZ Bank says it expects Indonesia's GDP growth to ease in 2019, against a backdrop of slowing global growth.

"Meanwhile, policy measures aimed at reining in the current account deficit, including the central bank's 175 basis points worth of rate hikes since last May, pose headwinds to domestic demand," ANZ says.

"Our forecast is for growth to come in at the lower bound of the central bank's projection of 5.0-5.4%."

ANZ says the combination of recent currency strength, benign inflation and a softening growth outlook means that a rate hike at Bank Indonesia's upcoming meeting later this month is not on the cards.  www.live.anz.com (ATI).