2022 GDP growth in Indonesia rose to a 9-year high as reopening from Covid-19 curbs boosted household consumption, and soaring global commodity prices boosted the country’s exports to a record high. Indonesia’s economy grew 5.31% in 2022, its fastest annual growth pace since 2013.

Indonesia’s Economy Grew 5.31% in 2022

Indonesia’s economy grew to the highest mark in nine years as the country’s reopening following the coronavirus pandemic and a strong global commodity market drove exports to a record high. The country’s economy expanded by 5.31% in 2022, according to Statistics Indonesia, marking its fastest annual growth rate since 2013 and beating analysts’ expectations of 5.29%.

The growth pace slowed in Q4 2022 as moderating prices and global demand, as well as record high inflation and interest rates, weighed on Indonesia’s economic activity. Its gross domestic product (GDP), which measures a country’s economic growth, grew 5.01% year-over-year, down from 5.72% in the earlier quarter, though still above the consensus estimates of 4.84%.

“We expect growth to slow further over the coming quarters. Exports will struggle due to weaker global growth and lower commodity prices.”

– Shivaan Tandon, an analyst at Capital Economics.

What Fueled the Indonesian Economy’s Record Growth?

The expansion of Indonesia’s economy to a 9-year high comes as robust global commodity prices in the wake of the Russia-Ukraine war boosted the Indonesian rupiah, lifting the country’s current account. Further, the nation’s household consumption which accounts for over 50% of its GDP, grew faster last year, boosted by relaxed Covid-19 restrictions.

Indonesia lifted the majority of coronavirus-related movement restrictions in 2022 after the number of daily cases dropped and vaccination rates increased, resulting in a notable surge in household consumption. By the end of 2022, Indonesia removed all remaining Covid measures.

Indonesia’s statistic bureau said investment rose 3.87% in 2022, though it remains below pre-pandemic levels. In addition, the country’s exports saw significant growth following Russia’s invasion of Ukraine in February 2022 amid surging commodity prices.

Meanwhile, things are not looking too good for the global economy, which likely faces a decade of sluggish growth, according to economists. Late last year, the International Monetary Fund (IMF) estimated that global GDP growth would slow from 6% in 2021 to 3.2% and 2.7% in 2022 and 2023, respectively.

The US GDP contracted in the first two quarters of 2022 as 40-year high inflation and aggressive interest rate hikes impeded the growth of the world’s largest economy. But the GDP growth recovered sharply in the last two quarters, rising 3.2% and 2.9% in Q3 and Q3, respectively.

This article originally appeared on The Tokenist

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