Indonesian businesses are raising alarm over a slowdown in manufacturing and domestic consumption even as headline GDP figures show growth accelerating.
South-east Asia’s largest economy, a commodities powerhouse, is grappling with waning purchasing power, a shrinking middle class and mass lay-offs in manufacturing at a time when President Donald Trump’s tariffs on US trading partners are increasing global uncertainty.
Economists and businesses said that a bullish GDP data release this week probably reflected government stimulus and export frontloading ahead of the US tariffs coming into effect. The economy expanded 5.1 per cent in the second quarter on a year earlier, beating expectations, after hitting a three-year low of 4.9 per cent in the first three months.