Indonesia sees Q3 GDP growth at 4.3% y/y, warns of future headwinds -Breaking
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© Reuters. FILE PHOTO : Containers were seen at Tanjung Priok port during the coronavirus virus disease (COVID-19), epidemic in Jakarta, Indonesia. REUTERS/Ajeng Dinar UlfianaJAKARTA, Reuters -Indonesia believes that rising exports will result in 4.3% economic growth in the third quarter. This is a refining a previous forecast of 4-5% growth. However, there are still headwinds ahead. The country’s finance minister cautioned Monday.
Southeast Asia’s biggest economy expanded by 7.7% in the 2nd quarter. But, due to the new wave COVID-19 infection in July, which was caused by the Delta variant spreading, and measures taken to manage the outbreak, its economic recovery has been hampered.
The third quarter data will be published on November 5.
The new forecast for the third quarter was an upward revision. Sri Mulyani indrawati, the Finance Minister, stated that indicators of domestic demand have improved since August’s second week, when antivirus measures were relaxed.
Record-breaking prices led to record exports from Indonesia. This country is also the biggest global supplier of palm oil and thermal coal.
Sri Mulyani stated that this “shows Indonesia’s economic is quite bullish” and added that the economic effects of the virus resurgence were “not too profound”.
A new official prediction for full-year 2021 growth was also made by the minister, which is 4% higher than the previous forecasts of 3.7% to 4.5%.
According to a Reuters survey, analysts predicted that Indonesia’s economy would have grown 3.2% and 4.6% respectively in the quarters of July-September, respectively. The forecast for growth in 2021 was 3.4% according to Reuters.
There is still potential for rebound in the fourth quarter. However, it will be at a slower pace. “But the rebalancing economic activities in China (the United States) and the European Union may affect us in fourth quarter and beyond,” Sri Mulyani explained.
She cited the potential for tapering in the United States, the European Union and a possible slowdown in China’s economic growth as headwinds to Indonesia’s recovery.
She added that the government anticipated financial market volatility, as well as lower demand from emerging markets because of these global events.
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