Indonesia GDP Expands 5.05% In Q2

(RTTNews) - Indonesia's economy grew slightly more than 5.0 percent in the second quarter as the deceleration in government spending growth was offset by household consumption and investment.

Gross domestic product grew 5.05 percent on a yearly basis compared to 5.11 percent in the prior quarter, data released by Statistics Indonesia showed Monday. Economists had forecast the economy to grow 5.0 percent.

Quarter-on-quarter, GDP advanced 3.79 percent, better than the expected growth of 3.71 percent.

Southeast Asia's largest economy expanded 5.08 percent in the first half of the year.

The expenditure-side breakdown showed that household spending advanced 4.93 percent from a year ago amid festive season. Meanwhile, government spending grew only 1.42 percent in the second quarter.

Investment expanded 4.43 percent. Exports moved up 8.28 percent and imports climbed 8.57 percent annually.

Capital Economics' economist Gareth Leather said this recovery is unlikely to last. The economist noted that high interest rates, lower commodity prices and subdued global growth would weigh on demand over the coming months.

With economic activity set to weaken in the coming quarters, and concerns about inflation receding, the central bank is expected to kickstart its monetary easing cycle in October, Capital Economics' economist Gareth Leather said.

In July, the Asian Development Bank projected Indonesia's economy to grow at a steady pace of 5.0 percent in both 2024 and 2025.