Household Consumption Remains the Main Driver of Indonesia's Economic Growth in 2023

The Central Statistics Agency (BPS) reported that Indonesia's Gross Domestic Product (GDP) grew by 5.05% cumulatively (cumulative-to-cumulative/ctc) throughout 2023.

By component, the highest growth was in Household Consumption Expenditure (PK-RT) at 4.82%, contributing 53.18% to national GDP growth.

“Household consumption expenditure continues to grow in line with controlled inflation and maintained public purchasing power,” said Amalia Adininggar Widyasanti, Acting Head of BPS, in an online press conference on Monday (5/2/2024).

The second highest growth was in Gross Fixed Capital Formation (PMTB) at 4.40% (ctc), contributing 29.33%. Amalia stated that the combination of the two components, PKRT and PMTB, contributed 82.51% to the GDP.

Next, export consumption expenditure grew by 1.32% (ctc), contributing 21.75% to Indonesia's GDP. This was followed by government consumption growth of 2.95% (ctc), contributing 7.45%.

Expenditure from the household non-profit institution (LNRPT) consumption component then grew by 9.83% (ctc), contributing only 1.25% nationally.

“This is due to increased activity in preparation for the general election, both by participants and organizers, such as socialization, national working meetings, regional working meetings, national coordination meetings, and national consolidations,” said Amalia.

Meanwhile, imports contracted by 1.65% (ctc). Its contribution was also negative at -19.57% throughout last year.

(See also: Indonesia's Economic Growth Slows to 5.05% in 2023)