Indonesia economy picks up pace in third quarter

Indonesia's economy grew at a faster pace than expected in the third quarter, surpassing forecasts, according to official data released on Thursday. The country's largest economy expanded by 5.5 percent in July-September, up from 5.3 percent in the previous quarter. This growth exceeded the 5.2 percent projection made by a Bloomberg survey of economists.

The surge in domestic demand was primarily fueled by robust household spending and investment, as well as a notable increase in government expenditure, according to Statistics Indonesia's Moh Edy Mahmud. Household expenditure, the main driver of the growth, rose by five percent compared to the same period last year, while investment surged by 6.1 percent, and government spending expanded by nearly nine percent.

The manufacturing, trade, construction, and information and communication sectors also played their part in the economic expansion. President Prabowo Subianto has set an ambitious growth target of eight percent by 2029, a goal some experts believe may be challenging to achieve. Despite this, the latest figures suggest that domestic demand is stronger than anticipated, with investment and government spending remaining resilient, said Irman Faiz, an economist at Bank Danamon Indonesia.

He added that the momentum in economic growth could continue into the fourth quarter, potentially boosting the country's growth to 5.4 percent this year and 5.1 percent in 2027.