Recovery Growth Momentum on Track

Indonesia Q4’15 GDP Growth of 5.04% yoy (vs 4.83% yoy estimate) ensure the economy recovery momentum is still intact (dismiss my previous concern). Government spending and Investment growth are the key drivers for this recovery. While private consumption remain resilient with 4.9% yoy growth..

Looking at sector breakdown, info & communication and finance sector post the highest growth in 2015: 10.06% and 8.53% respectively. Construction sector is also benefit from infrastructure spending with Q4’15 growth at 8.24% yoy (up from 6.82% yoy in Q3’15). The only one sector that contribute negative growth in 2015 is mining.

By geography, eastern province see a higher growth compared to Java in 2015. This is a good sign of a more balance growth among all region in Indonesia (more quality growth and positive for domestic consumption).

The risk onward came from deteriorating trade activity which may be worsen by slower global economic growth. However Government spending should become the buffer for domestic economy (although the risk will come from budget feasibility or specifically on revenue achievement). Maintaining private confidence will also be crucial to preserve the Investment growth momentum (by following up the economic package policy and avoiding another government intervention on private sector).

— -end of post #30