Indonesia's Economic Growth Slows to 4.94% in Q3 2023

The Central Statistics Agency (BPS) announced that Indonesia's economic growth reached 4.94% year-on-year (yoy) in the third quarter of 2023.

The growth of the Gross Domestic Product (GDP) only grew by 1.60% quarter-to-quarter (qtq) compared to the second quarter of 2023, which recorded 5.17% yoy. The figure for the third quarter of 2023 is also lower than the third quarter of 2022, which reached 5.73% (yoy).

Cumulatively, Indonesia's economic growth was recorded at 5.05% (cumulative-to-cumulative/c-to-c).

Acting Head of BPS, Amalia Adininggar Widyasanti, acknowledged the decline. She stated that a decline in Indonesia's economic growth often occurs in the third quarter.

"This is in line with the pattern in previous years, where third-quarter economic growth is always lower than the second quarter, except in 2020 during the Covid-19 pandemic," said Amalia during an online press conference on the BPS YouTube channel, Monday (November 6, 2023).

Besides seasonal factors, the decline in economic growth was also due to weakening exports and imports in the third quarter of 2023. Exports contracted by 4.26% and imports contracted by 6.18% (yoy).

However, Amalia stated that the 4.94% growth in the third quarter of 2023 still shows that the Indonesian economy remains solid and growing positively.

The GDP at current prices (ADHB) totaled Rp5,296 trillion in the third quarter of 2023. Meanwhile, the GDP at constant 2010 prices (ADHK) was recorded at Rp3,124.9 trillion.

From the production side, the construction sector experienced the highest growth at 5.87% (qtq), followed by electricity and gas supply at 3.77% and the manufacturing industry with a contribution of 3.48% (qtq).

Meanwhile, year-on-year (yoy), almost all business sectors recorded growth, except for administration, as well as mandatory defense and social security and education services, which contracted by 6.23% and 2.07% (yoy), respectively.

From the expenditure side, Gross Fixed Capital Formation (PMTB) experienced the highest growth at 7.70% (qtq).

The decline in national economic growth is also evident from the decrease at the provincial level. BPS stated that almost all provinces experienced a slowdown in economic growth year-on-year.