A downturn is likely in store for Indonesia’s economy in 2019 according to the CEIC Leading Indicator. The indicator value has been declining for 13 months straight to reach 96.3 in February, down by 0.4%m/m, according to preliminary data.
Although 2018 was off to a promising start with the indicator hitting a five-year high of 105.9 in January, the rest of the year failed to follow suit and September data fell below the long-term trend of 100 for the first time in two years.
Non-oil exports have been declining for the past four months while domestic issues such as shrinking cement consumption and motor vehicle sales are weighing on the economic development as well.
Indonesia’s economic growth has been remarkably steady in the last five years, with real GDP growth gravitating around 5% since 2014. Expectations are that the economy will decelerate marginally, as IMF and Focus Economics forecast 2019 growth at 5.1%.