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Indonesia Q3 GDP growth at a 2-year low

The 6.2% yoy figure however was in line with market expectations.

OCBC Treasury Research noted:

Clearly evident in the Q3 GDP data is the fact that domestic demand remains the strong backbone to growth prospect, with investment growth remarkably staying in the double digit territory, bringing the 4-quarter rolling average to about 11.0% yoy, its highest level since the global financial crisis erupted in 2008.

Meanwhile, the jump in private consumption growth to 5.7% yoy (highest since Q1 2009) was quite notable but not exactly hard to fathom if we consider the strong positive spillover impact from the robust investment growth seen since last year could be lagged.

Accordingly, it should be expected now that private consumption growth will remain very much supportive into 2013, given that the strong investment growth seen earlier this year is likely to mean a continuation of positive trickle-down impact on the economy.

It is therefore crucial to see investment growth staying strong in 2013, and while we have had encouraging data on realized investment amount that is likely to reach a record-high in 2012, there are also reasons to remain somewhat cautious.

While the contribution of investment to GDP has risen significantly since 2009, it is important to note that on a seasonally adjusted qoq basis, the sequential growth in investment is still seen as volatile.

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