Growth Moderated in 3Q 2016, But Will Likely Bounce Back

Economic Research	8 November 2016
Indonesia
Economic Highlights
Growth Moderated in 3Q 2016, But Will Likely Bounce Back Indonesia GDP growth moderated to 5.0% y-o-y in 3Q, after accelerating to +5.2% in the previous quarter. This was due to a moderation in private consumption and investment and a reversal into a contraction in government consumption spending. A larger contraction in exports dragged the growth further. By industrial origin, this was reflected in slower growth in agriculture output and weaker activities in manufacturing; trade; utilities, water supply; construction; real estate, accommodation, food & beverages; services and financial services & insurance sectors. A rebound in mining sector and a pick-up intransport & warehousing and information & communication sectors, however, provided a cushion to the overall growth. Overall, 3Q 2016 economic growth showed softer domestic and external demand. This brings the economy to grow by 5.0% y-o-y in 3Q, in line with our estimation but slightly lower than consensus estimation of +5.1%. We envisage the situation to recover into 4Q2016 and we maintain our real GDP forecast and expect a faster pace of growth of 5.1% in 2016, compared with +4.8% in 2015. Economist:  Rizki Fajar| +6221 2970 7065
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