Indonesia, which has been trying to jack up its tepid economic growth rate, likely achieved slightly faster expansion in the third quarter than in the previous three months.
The median forecast of 14 analysts in a Reuters poll is for annual growth of 5.13 percent in July-September. Indonesia’s gross domestic product expanded 5.01 percent from a year earlier in each of 2017’s first two quarters.
The statistics bureau is due to announce third-quarter GDP data on Monday (06/11).
If July-September growth turns out to be 5.13 percent, that will make it the best quarter since April-June 2016, when the pace was 5.18 percent.
President Joko “Jokowi” Widodo, whose five-year term ends in 2019, had pledged in the 2014 election campaign to get Indonesia’s annual growth rate up to 7 percent.
Aldian Taloputra, economist with Standard Chartered in Jakarta, said data that has come out so far on the third quarter points to a “broad improvement” from the first two periods of the year.
Strong external demand has that boosted Indonesian exports while government spending has picked up, especially in September, he said.
Recovery in demand for commodities such as coal helped Indonesia have a $3.2 billion trade surplus in the third quarter, compared with $2.28 billion a year earlier.
Better Than Expected
Gundy Cahyadi, an economist with DBS in Singapore, said “better-than-expected” pieces of data, including for sales of motorcycles and cement, signal that growth in July-September will be higher than it was in the first half.
The poll’s forecast is in line with the central bank’s projection for third-quarter growth of 5.1 percent to 5.2 percent.
Bank Indonesia officials said last month that data have pointed to better-than-expected consumption, the biggest part of Indonesian GDP.
In spite of the weak first six months, the central bank has maintained a full-year growth estimate of 5.0 percent to 5.4 percent.
During the third quarter, Bank Indonesia cut its key interest rate by 50 basis points to try to support sluggish credit growth and consumption. During 2016, the bank cut the rate a total of 150 basis points.
Despite those cuts, some economists remain concerned about consumption, and say more government spending and private investment is needed to jump-start it.
“The problem is not liquidity, but how to increase purchasing power,” Jahja Setiaatmadja, chief executive of Bank Central Asia, the largest privately owned bank, said last week.
