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JAKARTA – Indonesia’s economic growth accelerated in the second quarter of 2022 despite global uncertainty, according to soaring commodity prices and easing Covid-19 restrictions today.
Southeast Asia’s largest economy expanded 5.44% on-year in April-June, slightly up from 5.01% in the previous three months, the Central Statistics Agency said.
Exports, which account for a quarter of the country’s gross domestic product, grew 19.74% as prices for commodities were boosted after Russia’s invasion of Ukraine.
“The disruption of the global supply chain has led to the increase in prices of Indonesia’s key commodities, resulting in a windfall to export performance,” statistics agency head Margo Yuwono said.
The easing of Covid-19 restrictions across Indonesia and increased spending during the Eid ul Fitri holiday was also a boon for domestic consumption, Yuwono added.
The 5.51% jump in domestic consumption, which accounts for more than half of the economy, was helped by the government’s social aid for lower-income households.
But Gareth Leather, senior Asia economist at Capital Economics, said growth was expected to cool in the second half of the year as commodity prices retreated and a tourism surge that came after Indonesia reopened its borders eased.
“While an increase in tourism arrivals should provide a further boost to GDP in the third quarter and beyond, the boost from domestic reopening is largely over,” Leather said in a note.
“In addition, the recent decline in commodity prices and slower global growth will hold back exports.”
Indonesia dropped quarantine requirements for all travellers with a negative PCR test in March, leading to a spike in tourist arrivals.
The country welcomed more than 740,000 visitors in the first half of the year, an increase of more than 900% on-year. – AFP, August 5, 2022