JAKARTA -- The Central Statistical Agency (BPS) noted that Indonesia's economic growth in the third quarter of 2023 grew by 4.94 percent compared to the second quarter of 2022. According to BPS and economists, this growth rate indicates that Indonesia's economy is still quite resilient amid various global economic pressures.
The annual growth rate of the third quarter of 2023 was recorded to be lower than the I and II quarters of this year which grew 5.01 percent and 5.17 percent (yoy), respectively.
“Amid the slowing global economy, climate change, and falling prices of key export commodities, Indonesia's economic resilience has rebounded through economic growth of 4.94 percent on an annual basis or cumulatively, the Indonesian economy growing by 5.05 percent,” said Acting Head of BPS Amalia Adininggar Widyasanti in a press conference on Monday (6/11/2023).
She explained that the Indonesian economy based on gross domestic product (GDP) in the third quarter of 2023 on the basis of prevailing prices is IDR 5.296 trillion. Meanwhile, on the basis of a constant price of Rp 3.124,9 trillion.
Amalia did not deny that there was a slowdown in growth compared to the previous quarter. According to him, this is in line with the usual pattern in previous years. “Economic growth in the third quarter has always been lower than in the second quarter, except in 2020 when there was a Covid-19 pandemic,” Amalia said.
Meanwhile, on an annual basis, Indonesia's economic growth in the third quarter grew. With this achievement, Amalia affirms, the Indonesian economy remains solid and grows positively.
In terms of expenditure, household consumption is still the main support for Indonesia's economic growth in the third quarter of 2023 with a growth contribution of 2.63 percent (yoy). “Household consumption continues to grow as inflation controls,” Amalia said.
Amalia explained that the highest growth in household consumption was contributed by the transport and communications sectors. This resulted from increased sales of motorcycles and passenger rail, sea and air freight, as well as restaurants and hotels.
“(Hotels) benefit from an increase in hotel room occupancy (TPK),” Amalia said.
According to him, in fact, the contribution of household consumption to the source of growth in the third quarter of 2023 was relatively smaller than the contribution in the second quarter of 2023 which amounted to 2.77 percent (yoy) and the third quarter of 2022 which amounted to 2.81 percent (yoy). “Because household consumption has peaked in the second quarter of 2023,” Amalia said.
In addition to household consumption, the components that underpin economic growth in the third quarter of 2023, namely the gross fixed capital formation (PMTB) component with a growth source of 1.81 percent (yoy) followed by the nonprofit institutions serving households (LNPRT) component at 0.07 percent (yoy).
On the growth side, household consumption grew by 5.06 percent (yoy), the PMTB component grew 5.77 percent (yoy), and the LNPRT component grew 6.21 percent (yoy). “PMTB is driven by the growth of capital goods, buildings, vehicles, CBR, as well as intellectual property products, while LNPRT is driven by increased activity of political parties,” Amalia said.
Nevertheless, in the third quarter of 2023 there were three components that contracted, namely imports, exports, and government consumption, which sequentially contracted by minus 6.18 percent (yoy), minus 4.26 percent (yoy), and minus 3.76 percent (yoy), respectively
In terms of business field, the processing or manufacturing industry is the sector that is the largest source of Indonesia's economic growth in the third quarter of 2023, accounting for 1.06 percent (yoy). “This source of growth provided by the processing industry in Q3 2023 is greater than Q2 2023 (0.98 percent) and Q3 2022 (0.99 percent),” Amalia said.
Amalia explained that the growth of the manufacturing industry was supported by still strong domestic demand, among which the metal goods industry, which includes computers, electronics, optics, and electrical appliances, which grew 13.68 percent (yoy).
Then, the base metals industry was 10.86 percent (yoy), the transportation tools industry grew 7.31 percent (yoy), as well as the non-metal quarried goods industry grew 7.20 percent (yoy).
In addition to the manufacturing sector, economic growth in the third quarter of 2023 was also supported by the trade sector with a growth source of 0.66 percent followed by the transport and warehousing sector at 0.61 percent and the construction sector at 0.60 percent.
Meanwhile, the highest growing sectors were transport and warehousing which grew 14.74 per cent (yoy), other services grew 11.14 per cent (yoy), and accommodation and catering which grew 10.90 per cent (yoy).
“From the point of view of the business field, economic growth, among other things, is driven by increased production activity, mobility of people, visits of foreign tourists, the organization of several national and international events, as well as the start of political activities ahead of the elections,” Amalia said.
Economic observer from the Centre for Strategic and International Studies (CSIS) Fajar Hirawan estimated that the growth of the Indonesian economy in the third quarter of 2023 is quite optimal although it is still below 5 percent.
“Our economy in the third quarter was still growing at a positive 4.94 percent on an annual basis. Although below 5 percent, this growth is still quite optimal amid conditions of uncertainty due to conflict as well as the global economic slowdown,” Fajar said.
He explained that from the domestic side, the agricultural sector, which contributes a large part to the gross domestic product, did grow by only 1.46 percent, one of them due to El Nino conditions.
In addition, within the agricultural sector there are also plantation sectors such as oil palm which cannot be very reliable because they are highly dependent on export-import trade activities. “These conditions show that the national economy cannot depend on the agricultural sector,” he said.
However, Fajar continued, there are sectors driving economic growth that grew positively or above 5 percent, such as manufacturing at 5.2 percent (yoy) and trade at 5.08 percent (yoy). Meanwhile, the transportation and warehousing sectors also grew by double digits.
“It is these sectors that need to continue to be safeguarded to keep the economy growing in the 5 percent range until the end of 2023,” he said.
Fajar said that the third quarter economic growth, which grew below 5 percent, was in line with forecasts because the Indonesian economy did not escape the conditions of global uncertainty. He said that conditions of interstate geopolitical conflicts as well as economic slowdown of large economic countries such as China and the United States need to be anticipated.
If the geopolitical conflict becomes more widespread, it will have an impact on the supply of important commodities such as energy and food.
Ikuti Whatsapp Channel Republika