Indonesia’s Q3 growth falls short of expectations amid global uncertainty

Indonesia, Southeast Asia’s largest economy, posted a slower-than-expected growth of 4.94% in the third quarter of 2023, falling short of the Wall Street Journal’s predicted 5.06% and down from the second quarter’s expansion of 5.17%. The country’s GDP saw a quarter-on-quarter expansion of 1.60%, but this still lags behind last year’s third quarter GDP growth rate of 5.73%.

The slower growth was largely attributed to global uncertainty, effects of El Nino, and depressed commodity prices which led to a contraction in exports by 4.26%. Despite these challenges, domestic sectors continued to drive growth. The processing, transportation and warehousing, and construction industries played a significant role in bolstering the economy during this period, according to Statistics Indonesia.

While Indonesia grapples with external economic pressures, the resilience of its domestic sectors provides some buffer against these challenges. In particular, the country’s processing, transportation and warehousing, and construction industries have shown robust performance, contributing to the nation’s economic resilience amidst global uncertainties and lower commodity prices.