Indonesia GDP growth forecast at 6% yoy

Latest domestic car sales hit a record high amidst strong domestic growth.

OCBC Treasury Research noted:

The strong domestic growth story remains the fundamental support for Indonesia this year and indications remain robust on this front, with the latest domestic car sales hitting a record high and survey results from Nielsen also very much supportive to growth momentum ahead.

Stepping into H2 2012, we saw 3 main risks to growth prospect this year, namely higher inflationary pressure, the sustained pressure on the IDR to weaken and a worsening Eurozone crisis. Out of these 3, only the first risk seems to have eased in recent months, but an increasingly gloomy outlook of the Eurozone continues to weigh on Indonesia’s growth prospect ahead.

The upcoming export growth numbers will be crucial on this front, and it remains to be seen if the Trade Ministry’s rather upbeat outlook will pan out. At this juncture, we maintain our GDP growth forecast at 6.0% yoy for 2012.