Macro Economic

Indonesia Macro Update - GDP Growth 06 Feb 2024

Fikri C. Permana 06 February 2024

Tuesday, 6 February 2024

Continuing Robust Economic Growth in 4Q23

Indonesia's 4Q23 economic growth remained robust, achieving +0.45% QoQ and +5.04% YoY (Cons: +5.00% YoY, KBVS: +5.15% YoY, Prev: +4.94% YoY). From the Expenditure side, the growth in Household Consumption Expenditure component declined from +5.05% in 3Q23 to +4.47% YoY in 4Q23, contributing 53.18% to the total economic growth in 4Q23. From the Sectoral perspective, the Manufacturing Industry continued to dominate Indonesia's economy with a share of 18.67% in 2023. However, its growth slowed to +4.07% YoY (Cons: +5.19% YoY).

Headline inflation at +2.61% YoY at the end of Dec '23 is viewed positively in sustaining economic growth above +5.0% YoY. Looking ahead, the anticipated impact of front-loaded Government Expenditure, coupled with increased campaign funds, is expected to stimulate consumer purchasing power and Household Consumption Expenditure in 1Q24.

Additionally, with indications of economic improvement, reflected in the Manufacturing PMI of key trading partners, particularly China and India, in Jan '24, we anticipate continued support for economic growth from the trade perspective. However, it is acknowledged that Gross Fixed Capital Formation may face limitations leading up to the upcoming Presidential and Legislative elections.

Fikri C Permana - KBVS Research Team