Indonesia’s gross domestic product (GDP) growth has slowed down every quarter this year on the back of a slowdown in household spending, which economists attribute to weakening purchasing power. The country’s economic output increased just 4.95 percent year-on-year (yoy) in this year’s third quarter, according to Statistics Indonesia (BPS) data published on Tuesday. In the first three months of 2024, the economy logged annual growth of 5.11 percent, which was followed by 5.05 percent the following quarter. That brings GDP growth over the first nine months to 5.03 percent yoy. “There was no seasonal factor such as long holidays or religious festivities in the third quarter,” BPS interim head Amalia Adininggar Widyasanti explained in a press briefing on the latest data release, noting that Indonesia’s GDP relied heavily on household spending.Consumer spending tends to get a nationwide boost from festive seasons like the Ramadan and Idul Fitri period or Christmas and New Year. At a press conference later in the day, Coordinating Economic Minister Airlangga Hartarto echoed that argument as he noted that the third quarter had lacked vigor due to the fact that it had no religious festivities or school holidays. He added that full-year growth of 5 percent remained “within range”. The latest GDP report shows a slowdown in the consumer spending contribution to growth of 4.91 percent yoy from 4.93 percent yoy in the preceding quarter and 5.06 percent yoy in the third quarter of 2023. The deterioration in household spending was particularly pronounced in the expenditure groups of clothing, footwear, housing, housewares, education and health, said Amalia. While consumer spending still accounts for more than half of the country’s economic activity, its share in the overall GDP has declined from 54.93 percent in the first quarter to 54.53 percent in the second and 53.08 percent in the third.Bank Permata’s (one of well-known banks in Indonesia) chief economist wrote in an analysis on 5 November, 2024 that he projected full-year GDP growth of 5.04 percent, betting on President Prabowo Subianto ’s “pro-growth” economic agenda. He went on to say that the country might expect more direct investment and capital inflows in the fourth quarter as global interest rate cuts could change investor sentiment in favor of emerging economies.Source: https://www.thejakartapost.com/business/2024/11/05/gdp-growth-drops-below-5-as-consumer-spending-loses-steam.html (ICE GIACARTA)

Fonte notizia: The Jakarta Post, 5 November 2024