Indonesia's private consumption, which accounts for around 55% of GDP, grew by just 4.8% annually in the first quarter, slowing from 5.1% a year earlier, Nomura said.
Indonesia's household sentiment remains subdued, weighed down by a fragile labor market and lingering effects of the pandemic.
With structural reforms slow to take hold, the government is likely to rely more heavily on short-term fiscal and monetary support. The fiscal deficit is expected to widen to 2.9% of GDP this year, above the 2.5% target.
Bank Indonesia is expected to cut its benchmark rate by 50 basis points to 5%. Analysts say stronger policy action is needed to revive domestic demand and restore consumer confidence.
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