Indonesia Economy Expands 4.21% QoQ in Q2
Indonesia's gross domestic product grew 4.21 percent quarter-on-quarter in the three months to June of 2018, following a marginally revised 0.41 percent decline in the previous period and beating market consensus of a 4.08 percent expansion. It was the strongest growth rate since the series began in 2005, supported by a rebound in government spending and fixed investment and a faster increase in private consumption.
On the expenditure side, government spending surged 32.52 percent in the second quarter, after a 46.09 percent drop in the previous period; and fixed investment rose 0.97 percent, compared with a 4.86 percent fall in Q1. In addition, private consumption went up 1.54 percent, after increasing by just 0.1 percent in the preceding quarter. On the other hand, net external demand contributed negatively to GDP growth, as exports continued to decline (-0.89 percent vs -1.11 percent in Q1) while imports rose slightly (0.48 percent vs -3.96 percent in Q1).
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On the production side, output rebounded for: electricity and gas (3.09 percent vs -2.47 percent in Q1); mining and quarrying (2.23 percent vs -0.60 percent); transportation and storage (3.01 percent vs -0.45 percent); education (3.15 percent vs -11.35 percent); public administration (1.46 percent vs -8.91 percent); construction (0.94 percent vs -4.60 percent); human health and social work activities (1.55 percent vs -2.00 percent); water supply, sewerage, waste management and remediation activities (1.61 percent vs -1.16 percent). Also, output increased faster for: manufacturing (2.17 percent vs 0.76 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (3.19 percent vs 0.43 percent); accommodation and food service (1.96 percent vs 0.59 percent); information and communication (2.13 percent vs 1.05 percent); business activities (3.37 percent vs 1.12 percent); and other services (3.30 percent vs 1.37 percent). On the other hand, output expanded at a softer rate for: agriculture, forestry and fishing (9.93 percent vs 16.53 percent); financial and insurance activities (0.67 percent vs 2.38 percent); and real estate (0.92 percent vs 1.30 percent).
Year-on-year, the economy grew 5.27 percent in the second quarter, accelerating from a 5.06 percent growth in the previous period and beating market expectations of 5.16 percent. It was the highest growth rate since the December quarter of 2013.