GDP growth at 6.2% in 2012 was based on robust private consumption
and a better performance in fixed-capital investment (Figure 3.24.1).
Net exports fell, acting as a drag on GDP growth. Private con...
picked up to increase by 5.3%, the strongest pace in 4 years, and it
contributed almost half of total GDP growth on the expenditure side.
Consumption got a lift from increases in employment and wages as well
as lower inflation. Sales of automobiles rose by nearly 25%, even though
Bank Indonesia, the central bank, raised minimum down payments on
cars and motorcycles.
Fixed investment accelerated to 9.8% in 2012, building on the
previous year’s increase of 8.8%, and was the source of 2.4 percentage
points of GDP growth. Driving factors included an improved investment
climate, a record of solid economic growth over recent years, and the
expansion of credit. Outlays on buildings and infrastructure rose by
7.5%, and investment in machinery and equipment increased by a strong
12.7%. Renewed efforts to improve public infrastructure saw the central
government’s capital spending rise by 18.9%. As a result, the ratio of fixed
capital formation to GDP rose to 33.2%, the highest in at least 20 years
Realized foreign direct investment (FDI) surged by 26.1% to
$23.6 billion, nearly half into manufacturing and 17% into mining (the
data exclude investment in oil and gas). Investment in inventories also
Sources: Asian Development Outlook
database; CEIC Data Company (accessed 1 March 2013) -
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