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Indonesia's GDP Set to Grow 5% as Election Spending Surges


Indonesia's GDP is projected to grow by 5.0-5.1% by year-end 2023, bolstered by pre-election spending and infrastructure projects, according to University of Indonesia economist Teuku Riefky. The upcoming general elections are expected to stimulate public administration activity and social expenditure, with government spending already increasing by 8.15% year-on-year (yoy) in Q2. The construction sector also saw a leap from 0.32% growth in Q1 to 5.23% in Q2. Positive trends in investment and trade surplus, along with controlled inflation within the central bank's target, contribute to the optimistic outlook. Riefky highlights the role of consumer confidence, price stability, and exchange rates in mitigating risks posed by global economic slowdown and capital outflows that may affect the manufacturing sector.

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