Indonesia GDP slow to 4.4%

• Indonesia’s economy expanded at a slower YoY pace to 4.4% in Q1 2009 compared with 5.2% in Q4 2008.
• Growth was better than the expected 4.2%
• Indonesia has been less affected than its Asian neighbors as it isn’t as reliant on exports.
• Domestic demand appears to be holding up. 

“The fact that growth exceeded consensus signals we have reached the bottom and we can expect growth to pick up.” – Yudhi Sadewa (Chief economist at Danareska Research Institute)

• Goldman Sachs raised its 2009 forecast to 3.5% from a previous estimate of 2.5%
• Consumer confidence also soared to a 4 year high according to a 4 year high in April, according to a central bank survey of more than 4,300 households in 16 cities.

Respondents expected “relatively favorable” incomes over the next six months and were more willing to spend their money on durable goods”

• Spending by consumers jumped 5.8% in Q1 from a year earlier, from 4.8% in Q4.
• Investment increased 3.5%.
• Exports plunged –19.1% in Q1

Compared to other neighboring nations:

• Vietnam GDP 3.1%
• Philippine between 2.1% – 3.1%
• Hong Kong –7.8%

Lower borrowing costs are also encouraging consumers to spend.  Now at 7.25% in May. 

Motorcycle sales in Indonesia rose for the second time in March with 435,881 units sold. 

“The resilience of domestic demand will remain the bedrock to Indonesia’s growth recovery,Indonesia is one of the least external-demand-dependent economies in the region.” - said Enoch Fung (economist at Goldman Sachs Group Inc.)

Source: Bloomberg & RTT News