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Yearender: Strong consumption offsets weakening exports in 2023
World Bank said Indonesia's 5 percent growth shows resilience, despite the global environment and that this progress was a result of rebounding domestic demand.
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Passengers wait on Dec. 14, 2023, for a Commuter Line train at Manggarai Station in Jakarta. (Antara/Muhammad Adimaja)
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trong consumption has helped Indonesia achieve relatively good economic performance this year despite having to face the beginning of the end of the commodity boom early this year, which has dragged down exports, a key gross domestic product (GDP) growth driver in the previous year.
Exports were one of Indonesia’s main sources of economic buildup, with 16.28 percent year on year (yoy) growth in 2022, a year in which the country saw higher than expected GDP growth of 5.31 percent amid a tanking global economy, according to Statistics Indonesia (BPS) data.
At that time, prices of coal, crude oil and natural gas surged to multiyear highs, following uncertainty and supply disruptions, partly caused by the war in Ukraine. This includes crude palm oil (CPO), as the war disrupted vegetable oil supply.
However, commodity prices plummeted throughout this year, following weak global demand, despite remained higher than pre-pandemic levels.
As of November, commodities such as coal were down by 62.94 percent yoy to US$126.8 per tonne, while CPO was down by 12.19 percent yoy to $830.5 per tonne, according to the World Bank.
Read also: Trade surplus shrinks in November as imports rise
Indonesia, whose two largest export commodities are CPO and coal, saw its average export growth fall to 1.55 percent yoy nine months into this year, while its average GDP growth hovered at 5.05 percent yoy.
