JAKARTA, Nov 2 (NNN-Bernama) — Indonesia’s third quarter (Q3) gross domestic product (GDP) is expected to moderate to 4.5 per cent versus 7.1 per cent in the second quarter, Maybank Kim Eng said.
The brokerage said private consumption and investment, which accounts for 54 per cent and 32 per cent of GDP, respectively, were weighed down by the severe Delta outbreak and tightened restrictions.
Analysts Lee Ju Ye and Chua Hak Bin, in a research note today, said retail sales fell by -2.3 per cent in Q3 versus +11 per cent in Q2.
“Foreign direct investment contracted by -4.1 per cent versus +18 per cent in Q2, the first decline since Q2 2020, which the Indonesian Investment Ministry attributed to the border restrictions that prevented the entry of many skilled workers from abroad,” the analysts said.
However, domestic investment continued to rise, mainly driven by the primary sector, but at a softer pace.
Maybank Kim Eng maintains GDP growth forecast at 4.2 per cent in 2021 and 5.4 per cent in 2022 and average headline inflation forecast at 1.6 per cent in 2021 and 3.2 per cent in 2022.
Inflation has been tamed in Indonesia, the largest economy in Southeast Asia, as fuel subsidies capped the increase in energy prices while muted domestic demand capped core inflation.
“We expect inflation to rise in 2022 on the back of the value-added tax hike (to 11 per cent from 10 per cent starting April 2022), higher global commodity prices, and a domestic demand recovery,” the analysts said.
The third quarter results are set to be released on Friday.
— NNN-BERNAMA