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Indonesia GDP growth beats forecast in Q2, fastest in a year

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JAKARTA — Indonesia’s economic growth accelerated in the April-June quarter amid an export boom driven by rising commodity prices, official data showed on Friday, but monetary tightening, rising inflation and a global recession risk threaten the outlook.

Second-quarter gross domestic product (GDP) was up 5.44% on a year earlier, showing the fastest growth rate in a year, according to Statistics Indonesia data. That beat the median forecast of a 5.17% rise in a Reuters poll and the first quarter’s 5.01% annual growth.

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Exports expanded nearly 20% on a yearly basis, picking up pace from 16.22% in the previous quarter, which the statistics bureau called “impressive.”

Household consumption, which accounts for more than half of GDP, recovered further after the lifting of COVID-19 restrictions, with the Eid al-Fitr celebration in May providing a further boost. However, investment slowed.

By sector, food and beverages, mining, construction and transport and warehousing industries saw faster expansion than in the previous period.

However, Indonesia’s central bank said last month the rise in full-year 2022 GDP from 2021 would be at the lower end of the range of 4.5% to 5.3%. It previously forecast growth in the middle of that range.

In lowering its forecast, it said a global economic slowdown would dent exports and a rise in inflation at home would slow the pace of recovery in consumption.

Consumer prices in July were up 4.94% on a year earlier, marking a seven-year high in inflation and prompting calls by economists for Bank Indonesia to lift interest rates from pandemic-era lows. (Reporting by Stefanno Sulaiman, Gayatri Suroyo and Fransiska Nangoy; Editing by Bradley Perrett)

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