RHB Indonesia - Economic Growth Sustained In 2Q17 Unknown Selasa, 08 Agustus 2017




Good morning,

Economic Growth Sustained In 2Q17

Indonesia’s 1Q17 GDP expanded 5% YoY, the same pace with the previous quarter. Going forward, we expect the archipelago’s economic growth to hold up at 5.1% this year, from +5% in 2016. This is a downward revision from our previous estimation of 5.2% on the back of weaker-than-expected consumer spending. Going forward, GDP growth would continue to be supported by:
1. Rebound in Government spending as revenue collection improves;

2. Faster state budget disbursements for infrastructure projects;
3. Resilient household consumption;
4. Lower cost of borrowings
5. A pick-up in primary commodity prices.

¨ Economic growth picked up in 2Q17. It stabilised at 5% YoY in 1Q17. This was attributed to a pick-up in investment but offset by a reversal into a contraction in government spending and a slower growth in exports.
¨ Investment picked up, though, as private construction continues and the government ramped up infrastructure spending during the quarter.
¨ A relatively stable net export was recorded during the quarter. Growth in real exports of goods & services moderated to 3.4% in 2Q17 (1Q17: +8.2%).
In the same vein, growth in real imports of goods & services eased to 0.6% YoY in 2Q17 (1Q17: +5%). A moderation in both exports and import resulted in a relatively stable positive net exports contribution during the quarter under review.
¨ Three major sectors weakened. On the supply side, the stable GDP growth was driven by a rebound in mining sector and an acceleration in half of the categories, but offset mainly by a slower rise in the three major sectors (manufacturing, agriculture, and trade. Note that these three biggest sectors contributed almost half of the economy. (Rizki Fajar)


Link to report to be sent out later
Link to daily report: Indonesia Morning Cuppa 080817

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Best regards,

Helmy Kristanto
Director
Head of Indonesia Research
PT RHB Sekuritas Indonesia

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