Indonesia Gdp Growth Drops

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Indonesia Gdp Growth Drops

Indonesia's Gdp Growth In 2023 Drops To 5.1%

The latest data from the official statistics bureau has revealed that Indonesia's economic growth dropped a little bit in 2023. Despite the drop, the annual growth came out near 5.05%, which is still a pretty good number.

As per the available data, the decline in growth was attributed to a decrease in commodity prices and a contraction in exports to other countries.

5% Target Set By Indonesia'S Government

The growth rate was still higher than the 5% target set by Indonesia's government. When compared with the 2022 growth rate of 5.3%, the reading of 2023 is only slightly lower. In 2022, Indonesia's government enjoyed a record boost in exports along with a boom in the commodity market.

In 2023, weakness was seen in the export of commodities such as coil, palm oil, and nickel. In addition, the demand for these items from the major trade partners also declined as global growth remains vulnerable.

At the same time, Indonesia's economy is also under pressure due to the rate hike campaigns from the central bank. From October 2023 to August 2022, the interest rate was hiked by 2.5%.

Such a high-interest rate also affected domestic consumption, which ultimately showed up in the GDP numbers.

For Q4 2023, the GDP growth rate was recorded at 5.04% Y/Y, which is just a little higher than the 5% forecast set by the economists and the government.

For the year 2024, Indonesia's government has set its eyes on a growth rate of 5.2%. The government is hopeful that the campaign spending during the election phase will also help to uplift the domestic demand.

As for the global demand, it is still out of the hands of Indonesia's government. However, the officials remain hopeful that a strong comeback will be seen in the exports of commodities & other products.

The government has only increased the growth rate for 2024 by +0.1%, which is a pretty modest target.

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