POLL-Indonesia’s GDP growth gained speed in Q2 on record exports

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By Anant Chandak

BENGALURU, Aug 3 (Reuters)Indonesia’s economic system doubtless accelerated final quarter, buoyed by sturdy exports and personal consumption, however a slowdown in China and the specter of a world recession pose vital dangers in coming months, a Reuters ballot discovered.

With rising international commodity costs, the resource-rich nation has been having fun with an export increase. Its trade surplus in 2022’s first half was the best on record at $24.89 billion, greater than double that of the identical interval in 2021.

Southeast Asia’s largest economic system grew 5.17% in the April-June interval in contrast with the identical three months a yr earlier, the median forecast of twenty-two economists polled July 25-Aug. 2 confirmed.

On a quarter-on-quarter foundation, the economic system was predicted to have risen 3.44% final quarter from the earlier three-month interval, which noticed a contraction of 0.96%, in keeping with a smaller pattern of 10 economists.

“Daily new (coronavirus) cases remained under control and domestic activity continued to improve in the June 22 quarter. The quarter also had Ramadan and we expect robust sequential momentum for private consumption,” wrote Frederic Neumann, co-head of Asian economics analysis at HSBC.

“Windfall tax revenue from high commodity prices continued to support government spending. However, almost a month-long palm oil export ban in May will likely cause exports growth to contract sequentially.”

A separate Reuters ballot discovered GDP growth can be 5.1% this yr, inside Bank Indonesia’s estimate of 4.5% to five.3%, and reasonable solely barely to five.0% in 2023.

Inflation has been of little concern to Indonesia’s central financial institution to date, regardless of rising to a 7-year excessive in July.

Bank Indonesia Governor Perry Warjiyo stated on Monday core inflation was under the Bank’s 2.99% forecast and that coverage can be decided by the core inflation price and financial growth.

“We believe that BI will hike its key benchmark rate this quarter as core inflation has been increasing persistently since October 2021,” famous Irman Faiz of Bank Danamon.

“The rate hike would help slow down the coming inflation pressure and help stabilize IDR (the Indonesian Rupiah) without harming the growth recovery.”

(Reporting by Anant Chandak; Polling by Devayani Sathyan and Arsh Mogre; Editing by Jonathan Cable and Sandra Maler)

((Anant.Chandak@thomsonreuters.com;))

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