Indonesia's quarterly economic growth slowed for the first time in
almost two years, but has kept above 6 per cent for the period, thanks to its
continued strong domestic spending and rising investment.
Southeast Asia's largest economy
grew 6.17 per cent from July to September, compared with the same period a year
earlier, the country's statistics bureau announced yesterday.
Indonesia has so far been
relatively insulated amid a weakening global economy, although declines in
exports have been seen in recent quarters. But these have turned a corner, and
data released last week shows the export sector improving slightly for the second
month in a row.
However, it is feared that a
prolonged global downturn will put further pressure on the prices of
commodities such as palm oil, rubber and coal - all of which Indonesia exports
globally.
Credit Suisse's Robert
Prior-Wandesforde, who described the economic growth figure released yesterday
as "not bad", wrote in his research note to clients that the third
quarter's growth is the lowest registered in the past seven quarters.
Investment was the main driver of
growth, recording a 10 per cent spike, while household consumption grew by 5.7
per cent, according to the statistics agency.
Net employment increased by 1.1
million to 110.8 million as of end-August.
The head of the national
statistics bureau, Suryamin, told a press briefing yesterday: "The
increased job number indicates that the size of businesses has expanded.
Industries certainly were not cutting activities as domestic demand has been
high, although exports declined."
In addition, high investment
growth means there will be further economic activity in the following quarters,
he said, giving a rosy outlook for the economy.
The transport and
telecommunications sector grew 10.5 per cent year-on-year, the fastest in the
quarter ended September 30, mostly contributed by rising demand in the
mobile-phone industry.
Construction came in second, and
finance, real estate and corporate services third, with each of the two groups
growing by more than 7 per cent.
Higher construction activities
were attributed to the government's spending on the building of roads and
bridges.
However, the moratorium on the
hiring of civil servants this year and the early disbursement of civil
servants' annual bonuses made government expenditure look smaller in the third
quarter, said the statistics bureau.
Government spending declined by
3.2 per cent year-on-year.
Civil servants' bonuses were
disbursed in the third quarter last year, but in the second quarter this year.
Exports contracted by 2.8 per
cent, largely due to declines in the commodity sector.
Indonesia has navigated the
global slowdown with reasonably robust growth, and domestic demand
"clearly held up well relative to the rest of the region", said
Aninda Mitra, ANZ bank's Singapore-based head of economics for Southeast Asia.
Indonesia may record an overall
economic growth of 6.2 per cent this year, thanks to its resilience to global
shocks, Dian Ayu Yustina, an economist at Bank Danamon, told The Straits Times.
The country's stable inflation rates will prompt the central bank to keep its
benchmark interest rate at 5.75 per cent this year, providing industries with
stable financing costs, she added.
Wahyudi Soeriaatmadja
The Straits Times
Business & Investment Opportunities
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