Indonesia's QI GDP growth beats forecasts but outlook uncertain

Keeping strong pace will be hard due to tight local monetary policy, global factors

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Indonesia's economic growth in the first quarter beat expectations, buoyed by high public spending for the country's elections, but maintaining the strong pace will be challenging due to global developments and tight local monetary conditions.

South-east Asia's largest economy grew by 5.11 per cent on a yearly basis in the January to March period, the highest growth rate in three quarters. Growth exceeded the 5 per cent rate expected by economists polled by Reuters and the 5.04 per cent achieved in the fourth quarter.

In the first three months of 2024, campaign expenditure for the Feb 14 election and higher household spending during the Muslim holy month of Ramadan, which started in March, bolstered economic activity.

That helped offset the hit that Indonesia's economy has taken from declining commodity exports in the past year. The resource-rich country is the world's biggest exporter of thermal coal, palm oil and nickel, among other commodities.