Indonesia's 4Q GDP growth pegged at 6%

It's another star performer for Asia.

According to DBS, 4Q GDP numbers will be out and growth of 6% has been penciled into the firm's forecast. 

Resilience despite the tough external demand environment has enabled the economy to outperform its peers in the region. This was the case in 2009 and was repeated in 2012.

Although net exports have been a drag on growth for the first three quarters of 2012 (and likely to show a modest expansion in 4Q), investment growth was sustained amid a low interest rate environment and is on track to our estimated 10.4% this year.

Here's more from DBS:

Moreover, inflation stayed low while incomes have been edging up. This has translated into stable consumption growth over the past year.

To be sure, there are costs to running elevated levels of investment-led growth. This can be seen clearly by the surging capital imports over the past several quarters.

Coupled with depressed commodity prices and a general slowdown in external demand, the trade balance actually dipped into negative territory for the most part of 2012, placing stress on the external accounts.

The outlook for 2013 appears less challenging and we are expecting growth to reach 6.3%. The domestic economy is expected to perform well despite attempts by the authorities to moderate growth.

In April, more stringent conditions will be applied to Shariah financing for home and vehicle loans. In addition, the corridor between the FASBI deposit rate and the policy is likely to be normalized, implying 75bps worth of FASBI deposit rate hikes over the coming months.

These tightening measures are unlikely to derail the domestic economy. Moreover, there will be some consumption boost coming from the sizable minimum wage hikes in January.

Stabilization in the major economies and a turnaround in China should support external demand. The cyclical export uplift should also be boosted by moderate rises in commodity prices. This will help reduce stress on the external accounts and thus be less of a constraint to the broader economy.