Q1 2024 INDONESIA ECONOMIC REPORT
Gross Domestic Product
Indonesia’s economic growth is increasing massively amidst the weak global economy and financial market turmoil putting heavy pressure. In Q1 2024, the economy grew 5,11% (year on year). The main contributor to its growth was strong demand aggregate and budget support as a shock absorber decreasing unemployment rate (Cabinet Secretariat of Republic Indonesia 2024). During the first quarter of 2024, the provincial group in Java Island still showed its spatial influence in the Indonesian economy by recording a role of 57.70 percent despite experiencing a slowdown in growth of 4.84 percent compared to the first quarter of 2023 (year on year) (BPS 2024).
Latest Economic Developments 2014:Q3
1. Contraction in government expenditure has had adverse impact on the economy
Indonesia posted slower economic growth rate in quarter II-2014. According to data released by BPS, Indonesia registered economic growth of 5.12% (y-o-y) in quarter II-2014, which is far lower than 5.76% (y-o-y) posted in the same period the previous year. Indonesian economic growth has shown a downward trend over the last several quarters, which has complicated government efforts to achieve economic growth target of 5.5% (y-o-y) in 2014. To that end, this will remain a formidable challenge for the new government.
Latest Economic Developments 2014:Q2
The declining in net exports has caused the economic slowdown and significant increase generally in the government expenditure and energy subsidies in particular
Indonesian economy posted steep slowdown in quarter I-2014. Indonesian economy posted growth of 5.21% (y-o-y), in quarter I-2014, which represented a decline compared with 5.72% (y-o-y) posted in quarter IV-2013. Moreover, economic growth posted in quarter I-2014, was far lower than 6.03% (y-o-y), which was registered in the same period in the previous year.
Slower economic growth posted in quarter I-2014 is largely as a result of a significant decline in net exports. The significant contraction in net exports, adversely affected economic growth in quarter I-2014. The -0.78% (y-o-y) contraction of exports posted in quarter I-2014, was large enough to push net exports into negative territory, albeit -0.66% (y-o-y) contraction in imports. The decline in net exports is by and larger attributable to a decrease in exports of minerals such as coal and coal concentrates, which is a reflection of the performance of the mining sector that posted contraction of -0.38% (y-o-y). The poor performance of the mining sector is largely as a direct consequence of the coming into force of Mining Law No.4/2009 on exports of unprocessed minerals with effect from 12 January 2014. Nonetheless, sluggish growth of Indonesian economy is also due to persisting uncertainty in the global economy, as reflected by decline of economic growth of the economy of China from 7.7% (y-o-y) in quarter IV-2013 to 7.4% (y-o-y) in quarter I-2014, which by implication adversely affected the performance of Indonesian economy.