Acceleration in GDP Growth

Indonesia’s 2Q18 GDP growth was at 5.27% the highest growth since the 4Q13. The domestic consumption is the major factor of acceleration in GDP. The consumption growth was at 5.14% y-y, the highest since 2Q14. The success in maintaining a low and stable inflation amid the upbeat consumption cycle in Ramadhan month and Idul Fitri festive are crucial factors accelerating consumption.

On the other side, investment, a booster of the prior quarters GDP significantly lagged. The 2Q18’s growth in investment was at 5.87% y-y lower than the 1Q18’s growth of 7.95%. The rupiah depreciation since the early of 2018 and the decrease in the number of working days occurring in Idul Fitri festive are the main reasons underlining the lagging investment growth.

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