Indonesia 2023 GDP growth slows to 5.1%

Indonesia's annual economic growth fell slightly, but remained solid at 5.05 per cent last year, as exports contracted amid falling commodity prices, data from the statistics bureau showed on Monday (Jan 5).

That growth rate was close to the government's latest outlook of 5 per cent and slightly below the 5.3 per cent recorded in 2022, when economic activity was boosted by record exports amid a global commodity boom.

Last year, prices of Indonesia's main commodities like palm oil, coal and nickel dropped, while demand from major trade partners also softened amid weakening global growth. Southeast Asia's largest economy was also feeling the pinch from the central bank's rate hikes, totalling 250 basis points between August 2022 and October 2023, which hit domestic consumption.

In the final quarter of 2023, gross domestic product (GDP) grew 5.04 per cent year-on-year, roughly in line with a forecast of 5 per cent predicted by economists polled by Reuters.

The government is targeting 5.2 per cent GDP growth this year, hoping campaign spending for the Feb 14 presidential and legislative elections will boost domestic demand, with investment also potentially coming in after uncertainty surrounding the transition of power diminishes.

The statistics bureau is due to release the breakdown of GDP data later on Monday.