Independence Day 2024
The Indonesian economy posted another encouraging growth result for Q2 2024 at 5.05%, slightly below the 5.11% annual growth of Q1 2024. That rate of growth was achieved prior to the celebration of Indonesian Independence on August 17, 2024 in two venues: Jakarta and the new capital Nusantara, in East Kalimantan Province.
Compared to the previous quarter, the Indonesian economy expanded by 3.79%, which followed the usual cycle. The fastest sector of growth in Q2 2024 was accommodation and food services activity, which expanded by 10.17%, followed by transportation and warehousing, with growth of 9.56%. On the expenditure side, the highest growth took place in export activities, which rose by 8.28%.
By region, once again Eastern Indonesia achieved a high rate of growth in Q2 2024. With this performance, several provinces in the Eastern part of Indonesia have consistently grown at a faster rate than the other provinces.
The improvement of the economy was accompanied by a larger deficit of the current account for the quarter. While in Q1 2024, Indonesia's current account reported a deficit of $2,407 million or 0.71% of GDP, in Q2 2024 the current account registered a deficit of $3,021 million or 0.88% of GDP. At the same time, the financial and capital account of the balance of payments in Q2 2024 recorded a considerable surplus of $2,672 million. The large deficit in the current account combined with a surplus in the financial account led the overall balance of payments to a small deficit of around $557 million. This deficit resulted in a decrease in foreign exchange reserves to to $140,177 million at the end of June 2024.
The Central Board of Statistics also released the balance of trade data for July 2024. Exports rose by 6.55% M/M to reach $22,209.6 million, with non-oil exports up by 5.98% to $20,786.6 million. At the same time, imports increased even faster, by 17.82% to reach $21.737.6 million, resulting in a trade surplus of $472 million, sharply lower than that of the previous month.
The Central Board of Statistics also released the inflation report, which showed that inflation has slowed significantly. Prices for the month of July 2024 registered deflation of 0.18%. With that performance, Y/Y inflation stood at the level of 2.13%, significantly lower than the previous month and in the lower range of the target corridor of the Central Bank. Given that background, Bank Indonesia decided to keep the interest rate constant at 6.25%.
Now read on...
Register to sample a report