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The Indonesian system grew astatine the fastest clip successful much than a twelvemonth for the 3rd quarter, but this "might beryllium arsenic bully arsenic it gets" for the Southeast Asian federation arsenic planetary headwinds await, economists said.
On Monday, Indonesia posted year-on-year GDP maturation of 5.72% for the July to September quarter, higher than past quarter's maturation of 5.44%.
This was followed by a assistance successful the user assurance scale of 120.30 points successful October, up from 117.20 points successful September.
The rupiah, however, did not rally contempt the affirmative outcomes and remained comparatively flat, trading astir 0.33% higher connected Wednesday.
"Economic maturation successful Indonesia accelerated successful the 3rd quarter, but this is apt to beryllium arsenic bully arsenic it gets. We expect little commodity prices, tighter monetary argumentation and elevated ostentation to resistance connected maturation implicit the coming quarters," Capital Economics elder economist Gareth Leather said.
Leather said exports volition apt conflict against falling commodity prices and slowing planetary growth.
Indonesia, a large commodity exporter, has benefited from filling the proviso spread caused by the warfare successful Ukraine and once-steep commodity prices resulting from crimped proviso chains.
Morning commuters astatine a pedestrian crossing successful the cardinal concern territory of Jakarta, Indonesia, connected Nov. 5, 2021. Indonesia's system grew for the 4th consecutive 4th betwixt January and March arsenic Covid-19 restrictions continued to beryllium relaxed, statistic bureau information showed connected Monday.
Dimas Ardian | Bloomberg | Getty Images
The economist said Indonesia's tighter fiscal spending would besides dilatory request arsenic the Indonesian authorities commits to bringing the fund shortage backmost down. Jakarta is besides leaning towards tightening monetary policies to rein successful inflation, Leather said.
The Southeast Asian federation is 1 of the fewer countries successful Asia-Pacific to instrumentality it dilatory with involvement complaint hikes adjacent though the ostentation complaint of 5.71% successful October is 1 of the highest successful years, exceeding the cardinal bank's 2% to 4% target. Last month's ostentation was somewhat improved from September's 5.95%.
The rupiah was not buoyed by favorable GDP and user assurance results connected Monday and Tuesday, chiefly due to the fact that investors are besides paying much attraction to planetary movements, Leather said.
"A beardown dollar is weighing connected each risky assets, not conscionable the rupiah. [It is] hard for the currency to marque gains successful this environment," helium added.
DBS Bank's elder economist Radhika Rao said determination currencies are mostly drafting absorption from the broader U.S. dollar code and watching for signs of a dial down successful the Federal Reserve's complaint hikes.
Barclays elder determination economist Brian Tan was sanguine astir Indonesia's economy, telling CNBC's "Squawk Box Asia" connected Tuesday that contempt planetary headwinds, Indonesia could basal out.
"As we get into adjacent year, things volition look a small spot much challenging with the planetary environment, coming nether much pressure," Tan said.
"But overall, I would say, Indonesia is simply a precise domestically oriented system and ultimately, that should supply immoderate grade of insulation from what's happening extracurricular of Indonesia."
Barclays is expecting a forecasted 5.2% maturation complaint this twelvemonth to gaffe to 5% adjacent twelvemonth for Indonesia.
