Indonesia’s Q2 GDP beat forecasts at 5.3% year-on-year, but weak private demand and manufacturing raise concerns over growth quality.
Indonesia’s second-quarter GDP expanded 5.3% year-on-year, exceeding forecasts of 5.1%, driven primarily by public spending. The headline strength contrasts with persistent weakness in private consumption, manufacturing, and non-government GDP growth, which remained subdued.
While investment showed improvement, it also fueled import growth, complicating the outlook. A significant statistical discrepancy further clouds the assessment of underlying economic momentum, suggesting the headline figure may overstate the economy’s health.
Analysts caution that public-led growth lacks the sustainability of private demand-driven expansion, raising questions about the durability of the recovery.