- Q1 GDP growth forecast: 4.95% y/y vs. 5.01% in Q4
- Q1 GDP forecast -1.00% q/q vs. 0.36% in Q4
- Data due Friday 5 May
BENGALURU, May 3 (Reuters) – Indonesia’s annual economic growth likely slowed to its weakest level in more than a year in January-March, contracting on a quarterly basis as lower commodity prices hit exports and higher interest rates curbed domestic demand, a survey has found from Reuters.
Southeast Asia’s largest economy grew 4.95% year-on-year in the first quarter, according to the median forecast of 23 economists surveyed April 26-May 2. The growth forecasts for gross domestic product (GDP) were between 4.23% and 5.20%.
The economy is also forecast to have contracted 1.0% quarter-on-quarter for the first time in a year, based on a smaller sample of 11 economists. This follows growth of 0.36% in the October-December period.
The data will be released on May 5th.
“GDP growth slowed year-on-year in the last quarter of last year and we believe the weakness continued in the first quarter. Lower commodity prices have weighed heavily on exports,” noted Gareth Leather, senior Asia economist at Capital Economics.
“Looking ahead, we expect GDP growth to slow…as weak external demand and tightening monetary policy weigh on output.”
A recent separate Reuters poll forecast average growth of 4.9% this year and 5.0% next year, slightly below the International Monetary Fund’s estimates of 5.0% and 5.1%.
Exports from the resource-rich country surged to a record high last year on rising global commodity prices, but shipments have gradually slowed as global demand slowed.
Exports fell 11.33% yoy to $23.5 billion in March, compared with February’s 4.44% growth.
“As the commodity boom fades, growth will weaken and so will support for Indonesia’s external and fiscal positions,” wrote Krystal Tan, economist at ANZ.
“It will be challenging for Indonesia to weather the global growth slowdown, but resilient domestic demand will help provide some buffer.”
Reporting by Sujith Pai; Survey by Madhumita Gokhale and Anant Chandak; Edited by Hari Kishan, Ross Finley and Bernadette Baum
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