Key Takeaways
• Statistics Indonesia recorded economic growth 5.04% YoY, this growth slightly higher than the previously 3Q23 which growth 4.94% YoY. We estimate a 5.1%, GDP growth for the best- case scenario for FY24E, driven by government consumption in the infrastructure and social services sectors, while public consumption is supported by general election activities.
• Indonesia's annual inflation eased to 2.57% in Jan-24 from 2.61% in Dec-23, slightly surpassing the expected 2.55%. This aligns it closer to the BI's mid-point target range of 1.5% to 3.5% for the year. Inflation has followed a declining trend throughout 2023, reaching its lowest points in Sep-23 and Jan-24. We estimate that the CPI will be in the range of 2.51%-3.52% YoY, and BI will have room for interest rate cuts 2-3 times.
• Indonesia's trade balance recorded a surplus of USD3.31bn in December 2023, up from November's USD 2.41 billion (Exhibit 4). Exports grew by 1.89% MoM to USD22.41 bn, driven by a 1.06% increase in non-oil and gas exports and a 15.28% increase in oil and gas exports.
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