Economist Enrico Tanuwidjaja at UOB Group sees the Indonesian economy expanding at an annualized 5.2% during the current year.

Key Quotes

“Indonesia 4Q19 GDP growth slowed to 4.97% y/y vs. 5.02% seen in 3Q19, mainly due to weaker investment (4Q19’s 4.06% y/y vs. 3Q19’s 4.21%) and contraction in exports (4Q19’s -0.39% y/y vs. 3Q19’s 0.10%). This result also marked as the slowest quarterly economic expansion since 4Q16.”

“For full year 2019, Indonesia economy grew by 5.02%, slower than 5.17% seen in 2018 and short of the government’s 5.3% target. Exports was hit by US-China trade tension (which was one of the factors blamed for the global economic moderation in 2019) to a certain degree, while the general elections held back investment. Nonetheless, the country’s growth remained resilient, supported by relatively strong household consumption.”

“For 2020, we hold a cautiously optimistic view that the Indonesian economy will pick up, with our growth forecast of 5.2%. Higher GDP growth in 2020 is likely to be supported by easing global uncertainties (after phase 1 US-China trade deal), strong household spending, rebound in investment after an election year in 2019, and improved commodity prices. Nevertheless, it is important to remember that several downside risks remain, i.e. the impact of the novel coronavirus [2019-nCoV] outbreak and adjustments in some government-administered prices which could affect purchasing power to some extent.”

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