Indonesian economy likely grew over 5% in Q1, but risks continue to be skewed on downside

Indonesia is due to release its first quarter growth data in May. The economic growth is likely to have remained above 5% y/y in Q1 2016, according to market consensus. The Indonesian government has increased its budget disbursement. Also, consumption has likely grown strongly, noted DBS Bank. The DBS Bank projects that economy expanded 5.1% in the first quarter.

However, risks continue to be skewed on the downside. The trade data for March was disappointing. Capital goods import declined 27.8% y/y in March. The overall capital goods imports for the first quarter contracted 18.22% y/y. Meanwhile, investment growth is expected to have slowed again in the first quarter after growing strongly in Q4 2015, added DBS Bank.