Growth remained strong
The Indonesian economy posted another encouraging growth result in Q3 2024, albeit lower than the previous quarter, at 4.95%. This was slightly below the 5.05% annual growth in Q2 2024. The 3Q rate of growth led growth for first three quarters of 2024 to 5.03%. Compared to the previous quarter, the Indonesian economy expanded by 1.50%, which followed the regular cycle.
The fastest sector growth in Q3 2024 was in "other services", which grew by 9.95% Y/Y in Q3, followed by transportation and warehousing at 8.64%. On the expenditure side, the largest growth took place in the PK-LNPRT (the Expenditure Component of Non-Profit Institutions Serving Households), which grew by 15.10% Y/Y during the quarter.
By geographic region, once again, Eastern Indonesia achieved a high rate of growth in Q3 2024. With that performance, several provinces in the Eastern part of Indonesia have consistently grown at a faster rate than the other provinces.
The improvement in the economy was accompanied by a smaller deficit of the current account for that quarter. While in Q2 2024, Indonesia's current account reported a deficit of $3,246 million or 0.95% of GDP, in Q3 2024 the current account reported a deficit of $2,150 million or 0.60% of GDP. At the same time, the financial and capital account in the balance of payments in Q3 2024 recorded a considerably large surplus of $6,571 million. The lower deficit in the current account combined with the surplus in the financial account led the overall balance of payments to record a large surplus of around $5,867 million. The large surplus of the balance of payments led foreign exchange reserves to increase to $149,922 million as of the end September 2024.
The Central Board of Statistics also released the balance of trade data for the month of October 2024. Exports increased by 10.69% M/M and reached $24,413.5 million, with non-oil exports up by 10.35% to $23,068.3 million. At the same time, imports increased even more sharply, by 16.54%, to reach $21.938.3 million, resulting in a trade surplus of $2,475.2 million, below that of the previous month.
The Central Board of Statistics also released the inflation report, which showed that inflation has slowed significantly. For the month of October 2024 inflation was reported at 0.08%. With that performance, Y/Y inflation stood at 1.71%, a level significantly lower than the previous month, which was already in the lower part of the target corridor of the Central Bank. Given this background, Bank Indonesia decided to keep the bench mark interest rate constant at 6.00% at its meeting on November 20, 2024.
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