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Sustaining Indonesia's growth amid global uncertainty
Indonesia's economy remains solid amid higher global uncertainty. It grew by 5.72 percent in third quarter of the year compared to the same period last year, exceeding the growth in the second quarter of 5.44 percent. This growth is mainly supported by export performance and household consumption.
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Mandiri Leading Economic Index (MLEI) and Indonesian GDP growth comparison. (Bank Mandiri/BPS)
Jakarta
Indonesia's economy remains solid amid higher global uncertainty. It grew by 5.72 percent in third quarter of the year compared to the same period last year, exceeding the growth in the second quarter of 5.44 percent. This growth is mainly supported by export performance and household consumption.
Government spending, on the other hand, contracted. The government can increase spending in the fourth quarter by ensuring sufficient revenue to finance expenditures until the end of the year. With regard to sources of growth, the manufacturing industry was the most significant contributor to the economy in the third quarter, with a share of 17.88 percent.
By sector, the transportation and warehousing sector had the highest growth of 25.81 percent, followed by the accommodation and food and beverage sector, which grew by 17.83 percent compared to the third quarter of 2021.
Indonesia's third-quarter economic performance confirms our Mandiri Leading Economic Index (MLEI), which suggested the economy would grow faster than in the second quarter of this year. The MLEI is a composite index that seeks to predict the movement of GDP in the next quarter. That can be useful as an early warning of trends in the Indonesian economy.
The MLEI's performance so far is quite representative of the direction of GDP movement, and we forecast that Indonesia's economy will grow moderately in the fourth quarter of 2022. In 2022, the average MLEI in the second quarter of 101.1 was higher than the average MLEI in the first quarter of 100.9, so it predicted that the economy would grow more in the third quarter than in the second quarter.
In addition, results from the Bank Indonesia Business Activity Survey show that business activity in the third quarter of 2022 remained strong. Higher growth was reflected by the weighted net balance (WNB) of 13.89 percent in the third quarter of 2022.
