Indonesia growth exceeds forecast

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Indonesia’s economy grew better than expected in the second quarter of 2012 due to rising domestic and foreign investment activity and robust domestic demand.

Gross domestic product climbed 6.4 per cent over the same period last year, slightly faster than the 6.3 per cent gain logged in the first quarter, the Central Statistics Agency said in a report in August 6. Economists had forecast growth to ease to 6.1 percent due to weakening exports.

However, the global downturn has hit Indonesia’s exports, with the country recording its largest monthly trade deficit of $1.3 billion in June. Exports rose slightly by 1.9 per cent on a yearly basis, while imports gained 10.9 per cent.

Indonesia’s Investment Coordination Agency said in July that domestic and foreign direct investments into Indonesia rose by 28.1 per cent in the first half of 2012. Total realised investments between January and June 2012 stood at 76.9 trillion rupiahs ($8.13 billion), as reported by Inside Investor.

The surprise acceleration in economic growth eases pressure on the central bank to ease its policy. Bank Indonesia is widely expected to hold its key rate at a record low 5.75 per cent at the meeting on August 9.

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Reading Time: 1 minute

Indonesia’s economy grew better than expected in the second quarter of 2012 due to rising domestic and foreign investment activity and robust domestic demand.

Reading Time: 1 minute

Indonesia’s economy grew better than expected in the second quarter of 2012 due to rising domestic and foreign investment activity and robust domestic demand.

Gross domestic product climbed 6.4 per cent over the same period last year, slightly faster than the 6.3 per cent gain logged in the first quarter, the Central Statistics Agency said in a report in August 6. Economists had forecast growth to ease to 6.1 percent due to weakening exports.

However, the global downturn has hit Indonesia’s exports, with the country recording its largest monthly trade deficit of $1.3 billion in June. Exports rose slightly by 1.9 per cent on a yearly basis, while imports gained 10.9 per cent.

Indonesia’s Investment Coordination Agency said in July that domestic and foreign direct investments into Indonesia rose by 28.1 per cent in the first half of 2012. Total realised investments between January and June 2012 stood at 76.9 trillion rupiahs ($8.13 billion), as reported by Inside Investor.

The surprise acceleration in economic growth eases pressure on the central bank to ease its policy. Bank Indonesia is widely expected to hold its key rate at a record low 5.75 per cent at the meeting on August 9.

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