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ANZ analysts note that the Indonesia’s GDP growth eased in Q1 to 5.07% y/y, the softest reading in a year, broadly in line with their expectations.

Key Quotes

“The breakdown showed a slump in exports (-2.08% y/y), though a sharper fall in imports (7.75%) meant that net exports were a positive contributor to headline growth.”

“While government spending growth picked up ahead of the April elections, and private consumption growth edged up, these were offset by a pullback in investment growth and a slump in exports.”

“The sluggish outturn in Q1 supports our view for rate cuts in 2019, but the recent volatility in the rupiah suggests a move next week is not on the cards.”