After correction by Finance Ministry, headline and lead paragraphs of Q3 GDP growth forecasts are corrected to 4.5% instead of 4.3%.

JAKARTA, Reuters – Indonesia’s finance minister warned Monday that there are headwinds ahead. He said that rising exports will result in 4.5% economic growth in the third quarter. This is in line with a previous forecast of 4-5%.

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.

On Nov. 5, data for the third quarter will be available.

Sri MulyaniIndrawati, Finance Minister, said that the revised third quarter forecast was an upward revision. He also stated that domestic demand indicators had increased since the second week in August when anti-virus precautions were eased.

Record high prices have caused Indonesia to see record-breaking growth in its exports of palm oil and thermal coal.

Sri Mulyani, an Indonesian journalist said that “this shows Indonesia’s economy to be quite bullish.” He also stated that the economic consequences of the virus revival were not too severe.

Minister also provided a revised official forecast for growth in 2021 of 4% as compared to a prior forecast of 3.7%- 4.5%.

An analyst predicted Indonesia’s economic growth to be 3.2% for the July-September quarter and 4.6% for the current quarter. According to a Reuters poll this month, 2021 growth is expected to be 3.4%.

The fourth quarter still has the potential to rebound but at a lower rate than normal. “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.

The possibility of tapering in America and Europe, and a slowdown or halt in China’s economy growth, along with rising inflation worldwide, were all potential threats to Indonesian recovery.

She added that the government anticipated financial market volatility, as well as lower demand from emerging markets because of these global events.

This story is corrected after corrections by Finance Ministry.