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Indonesia’s GDP growth to remain sluggish, or even slow next year: Analysts
Credit rating agency Moody’s estimates Indonesia’s GDP will grow by only 4.9 percent this year and further decline to 4.7 percent in 2020
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President Joko “Jokowi” Widodo (second left), accompanied by Industry Minister Agus Gumiwang Kartasasmita (right), talks to the founder of PT Chandra Asri Petrochemical Prajogo Pangestu (second right) following the inauguration of the company’s polyethylene plant in Cilegon, Banten on Dec. 2. The President hopes the new factory can save imports of polyethylene and create more jobs.
(Antara/Asep Fathurahman)
I
ndonesia's GDP growth is expected to remain sluggish in 2020 as weakening exports and commodity prices in addition to global uncertainties continue to take their toll on the economy.
The country's economic growth is expected to grow by 5 percent this year and will remain the same in 2020, according to Singapore-based lender Bank DBS Indonesia economist Masyita Crystallin.
"Next year's flat baseline is an optimistic [stance] because of weak exports, investment and consumer spending. Growth, however, should pick up by 2021 to just 5.1 percent," said Masyita in a press briefing in Jakarta on Dec. 4.
The country’s annual GDP growth stood at 5.02 percent in the third quarter of this year, down from 5.05 percent in the second quarter, as investment and exports plunged while household spending stagnated, Statistics Indonesia (BPS) data revealed.
"Weakening exports pose the biggest risk as there is a possibility that imports will pick up by June next year."
Masyita said the country's economic growth would mainly be supported by higher consumer spending and investment. "We expect that regional elections in 2020 could boost spending while investment could start to accelerate next year as political uncertainty driven by this year's elections becomes less significant [for investors]."
The growth of investment, which accounts for about a third of the country’s GDP, plunged to 4.21 percent from 6.96 percent recorded in the same period last year, BPS data show.
