Indonesian economic growth rises to nine-year high

JAKARTA: Indonesia’s economic growth accelerated to a nine-year high in 2022 despite global uncertainty and a final-quarter slowdown, official data showed Monday, owing to soaring commodity prices and easing Covid-19 curbs.

Indonesia was badly affected by the coronavirus pandemic, with its exports and tourism-reliant economy taking a massive hit in 2020 as GDP shrunk by 2.07 percent – its first recession since the 1997 Asian financial crisis.

But Southeast Asia’s largest economy has bounced back since then, posting economic growth last year of 5.31 percent, Statistics Indonesia said Monday, the highest level since 2013.

“The figures show that Indonesia’s economy grew solidly in 2022,” statistics agency head Margo Yuwono said.

He said growth was propelled by high export prices and the lifting of travel restrictions, with dropped quarantine requirements in March spurring business and spiking tourist arrivals.

“The reopening of almost all international airports has boosted people’s economic activity,” Yuwono said.

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The country welcomed more than 740,000 visitors in the first half of the year, an increase of more than 900 percent on-year.

The annual rise came despite slowing growth in the final quarter of the year after a strong July-September.

The economy expanded 5.01 percent on-year in October-December, down from 5.72 percent in the previous three months.

But it still maintained its annual rise from pandemic lows after expanding 3.69 percent in 2021 as coronavirus cases started to decline and export prices for key commodities like palm oil, coal and nickel rose significantly.

The country’s economic growth is expected to slow slightly this year despite the recovery, according to economists.

“Further weakness is likely as weak global demand, high inflation and elevated interest rates drag on activity,” said Gareth Leather, senior Asia economist at Capital Economics.

“We expect growth to slow further over the coming quarters.”