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Surge in commodity prices drives growth in Indonesia
Statistics Indonesia (BPS) reported Friday the country's economic growth was recorded at 3.51 percent, slower than the previous quarter and below government expectation.
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Coal boom: Coal barges queue to be pulled along Mahakam River in Samarinda, East Kalimantan on Aug. 31, 2019. Primary commodity boom like coal has helped Indonesia’s exports grow in the third quarter of this year. (Reuters/Willy Kurniawan)
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ndonesia’s economic growth in the July to September period turned out to be slower than the government expected as the Delta wave and fresh mobility curbs weighed on business and consumer activities.
Statistics Indonesia (BPS) reported Friday the country’s gross domestic product (GDP) grew by 3.51 percent year-on-year (yoy) in the third quarter, roughly half the growth seen in the second quarter.
The government recently raised its third quarter GDP growth estimate to 4.5 percent from 4.3 percent, only to be disappointed with the 1.01 percentage point gap with the actual growth.
“Compared with past years, this is still below 5 percent,” BPS head Margo Yuwono said in a virtual press briefing on Friday, referring to the average growth seen before the pandemic. “If we compare it with the second quarter of 2021, this marks a slowdown.”
The Delta wave, which peaked in July and August, disrupted Indonesia’s efforts to recover from the pandemic-induced economic slump as the government implemented emergency public activity restrictions (PPKM Darurat) on July 3. Shopping centers were closed, dine-in was banned, market operating hours were limited and travel was restricted, among other things.
At the same time, strong commodity prices, particularly of coal and crude palm oil (CPO), kept Indonesia's trade surplus at record highs, buoying GDP growth. During this pandemic, net exports became the main contributor to growth except in the second quarter of this year, compensating the contraction in other expenditure components.
