![]() Retail sales have been patchy this year - largely driven by basics like food, beverage and fuel, while discretionary spending has yet to bounce back. Much of the scrutiny zeros in on the strength of consumption, which powers over half of Indonesia’s GDP. ![]() “In fact, we think that a weaker-than-potential growth is likely keeping core inflation at low levels.” “We are forecasting GDP growth at 4.6% in 2023, lower than the pre-pandemic potential growth of 5.3%,” HSBC Holdings Plc economist Pranjul Bhandari said of Indonesia, citing El Niño, a pullback in state spending and tepid external demand as hurdles. Malaysia and Thailand have yet to report last quarter’s GDP. Vietnam is struggling to meet its target. Neighboring Philippines also reported a sharp slowdown in second-quarter growth as inflation doused revenge spending while Singapore posted slower than initially estimated figures. That casts doubt on a region that’s been insulated from the global recession risk because of their strong domestic economies. Without the spending on major Muslim holidays that propped up growth in Southeast Asia’s largest economy to 5.2% in the April-June period, economists expect a deceleration to 5% then 4.9% in the next two quarters. While its latest gross domestic product print shows a consumption boom that’s hovering near levels a decade before the pandemic, it has largely left behind lower-income households beset by low wages and limited opportunities. (Bloomberg) - Indonesia’s growth performance last quarter is poised to top most of its peers in Southeast Asia, but its path ahead is tricky amid widening cracks in the economy after the pandemic.
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