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Indonesia shows moderate growth with high inflation: ADB
Slower growth: The Asian Development Bank (ADB) has lowered Indonesiaâs GDP growth forecast for 2015 to 4
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Slower growth: The Asian Development Bank (ADB) has lowered Indonesiaâs GDP growth forecast for 2015 to 4.8 percent from the 4.9 percent outlined in its September outlook. (Antara) (ADB) has lowered Indonesiaâs GDP growth forecast for 2015 to 4.8 percent from the 4.9 percent outlined in its September outlook. (Antara)
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span class="inline inline-center">Slower growth: The Asian Development Bank (ADB) has lowered Indonesia's GDP growth forecast for 2015 to 4.8 percent from the 4.9 percent outlined in its September outlook. (Antara)
The Asian Development Bank (ADB) has recently updated its outlook on Indonesia, forecasting moderate gross domestic product (GDP) growth of 4.8 percent in 2015, or slightly higher than the average growth of its Southeast Asian neighbors, which stands at 4.4 percent.
The ADB outlook argues that Indonesia's inflation will stand at 6.4 percent in 2015, making it the country with the highest inflation rate compared to other countries in the region. The average inflation rate for Southeast Asia stands at 2.8 percent.
The ADB stated in a press statement released on Thursday that its current outlook lowered Indonesia's GDP growth forecast for 2015 to 4.8 percent from the 4.9 percent outlined in its September outlook. The bank says that the decline is due to lower-than-expected budgetary disbursements and ongoing problems in exports. The ADB forecasts that Indonesia's exports will rejuvenate next year
The ADB outlook says that Indonesia's real GDP growth in the third quarter of this year stood at 4.7 percent. Vietnam and the Philippines are the two countries that led growth in Southeast Asia in 2015. Vietnam grew at 6.5 percent and the Philippines grew at 5.9 percent. Vietnam has received high foreign direct investment and the Philippines has been supported by strong domestic demand and remittances from overseas workers. In Asia more broadly, India and China (PRC) are still the prime drivers of growth. India grew at 7.4 percent and China grew at 6.9 percent in 2015.
'Although we have seen some softening in a number of economies, the broader regional outlook is for continued steady growth,' ADB chief economist Shang-Jin Wei said.
'The region's growth is supported by vibrant private consumption in the PRC and expanded industrial production in India and in other countries. At the same time, countries reliant on commodities are hurting from the global slump in prices. The slower-than-expected recovery in the US and an economic contraction in Japan will continue to weigh on export prospects,' the economist added.
The ADB says in its outlook that inflation will remain a problem for Indonesia. It forecasts that Indonesia's inflation rate will stand at 6.4 percent in 2015, far higher than the inflation rates of other Southeast Asian countries. Despite their high GDP growth, Vietnam and the Philippines are forecast to record low inflation rates of 0.9 percent and 1.6 percent, respectively.
In real inflation data published by the Central Statistics Agency (BPS), Indonesia's inflation rate in November stood at 4.89 percent year-on-year. BPS deputy head of distribution and service statistics Sasmito Hadi said that inflationary pressures mainly came from the prices of chicken, rice and cigarettes. (ebf)
