Jakarta (VNA) – Indonesia posted an economic growth rate of 5.03% in the first quarter of 2023 thanks to improved consumption and increase public spending despite a slowdown in the global economy, according to Statistics Indonesia (BPS).Data released by BPS on May 5 show that the country’s GDP growth in the first quarter of this year is 0.02% higher than that of the fourth quarter of 2022, while a Reuters poll had expected the GDP to expand 4.95%.

Although analysts expect Indonesia’s economic momentum to cool down as commodity prices fall and central banks around the world continue to maintain a tight monetary policy that affects global demand, Indonesia’s post-pandemic recovery is still underway thanks to a boom in commodity exports.

Economists said that the Indonesia’s central bank – Bank Indonesia (BoI) tightened monetary policy including raising interest rates by a total of 225 basis points from August 2022 to January 2023 to combat inflation, which had affected domestic demand. However, stable macroeconomic policies are helping the Indonesian economy to make positive changes.

Statistics show that the inflation index in the most populous country in Southeast Asia has been well controlled. The BoI has paused monetary tightening measures in the last two months. Some economists expect the bank to keep interest rates unchanged for the rest of the year. However, some analysts believe that to support the economic growth momentum, the BoI will likely loosen monetary policy later this year.

In the first quarter of 2023, household consumption growth, which accounts for more than half of the GDP in Indonesia, increased slightly to 4.54% from the rate of 4.48% in the previous quarter. Meanwhile, government spending increased by 4% compared to the fourth quarter of 2022./.