Business News Asia
According to Indonesia’s statistics office, gross domestic product (GDP) grew by 5.44% in the second quarter of 2022, faster than in the first quarter (5.01%).
The Indonesian economy was driven by strong exports and the government’s return to open borders. Exports rose by almost 20% in the second quarter, following a 16.22% increase in the first quarter.
The better-than-expected GDP growth in the second quarter may prompt Indonesia’s central bank to turn its attention to controlling inflation. Indonesia’s inflation rate is currently at its highest level in seven years.
The Central Bank of Indonesia announced that the Consumer Price Index (CPI), rose 4.94% in July, the highest level in seven years and above the central bank’s target range.
The Indonesian central bank is expected to further curb inflation. This is because there is a risk that the global economy will fall into recession. This is due to the Fed’s accelerated interest rate hikes and the slowdown in the Chinese economy.
Indonesia’s central bank expects GDP growth to be below the midpoint of the central bank’s target range of 4.5% to 5.3% for the year, given the uncertainty surrounding global economic developments.