Strong Domestic Consumption Keeping Indonesia’s Growth High

Indonesia’s economy grew at a faster annual pace than expected in the fourth quarter, as domestic consumption remained strong despite aggressive tightening by the central bank.

Gross domestic product rose 5.72 percent in the October-December period from a year earlier, buoyed by firmer exports on a weaker rupiah and growth in the transportation and communication sectors, the statistics bureau said on Wednesday.

The result beat economists’ expectations of 5.30 percent year-on-year growth and was faster than a 5.62 percent rise in the third quarter.

“Today’s GDP figures suggest that the Indonesian economy has not yet responded to the policy tightening measures put in place over the past year to orchestrate an adjustment of the current account,” said Taimur Baig, Asia chief economist at Deutsche Bank.

CNBC

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