Last 12 months, Indonesia’s economic growth hit its highest level in nine years on account of increased spending on account of the easing of pandemic restrictions and record high exports fueled by growth in global goods.
After the Russo-Ukrainian war, high global commodity prices benefited Southeast Asia’s largest economy, helping the rupee and improving the country’s current account.
However, the pace of expansion slowed within the last quarter as prices fell, and this 12 months’s activity could also be hampered by lower global demand, high inflation and rising rates of interest.
GDP grew 5.31% in 2022, faster than the 5.29% growth rate predicted by a Reuters poll and the very best annual growth rate since 2013, in keeping with data released by Statistics Indonesia on Monday.
In contrast to the survey’s expected growth of 4.84% and 5.72% within the previous three months, gross domestic product grew by an annualized 5.01% within the fourth quarter.
More than half of Indonesia’s GDP comes from household consumption, which rose last 12 months, mainly driven by travel-related spending as Covid-19 restrictions eased.
After falling day by day cases and rising vaccination rates that boosted food consumption in families, Indonesia last 12 months eased most of its movement restrictions. At the tip of the 12 months, the last remaining restrictions were lifted.
According to the statistics office, investment increased by 3.87% last 12 months, on par with growth in 2021, but has not yet reached pre-pandemic levels.
After the beginning of the Russia-Ukraine war in February, exports increased consequently of soaring commodity prices. Indonesia is a major source of nickel steel, palm oil and steam coal. Last 12 months, the country’s exports topped a record $292 billion.
Meanwhile, government spending fell in 2022 as Jakarta began to scale back its reliance on pandemic-era health and social care spending.
Government officials predicted a world economic collapse that might further plunge commodity prices and slow Indonesian exports, saying economic activity could stall this 12 months.
Source: CNBC.com
