Indonesia 's economy grew at its slowest in four years in the first quarter as a mineral export ban, successive interest rate rises and uncertainty over upcoming presidential elections unnerved investors.
According to the country’s statistics bureau, the gross domestic product (GDP) in the January-March period expanded 5.21 percent from a year earlier, the slowest pace since the third quarter of 2009 and compared to 5.60 percent forecast in a Reuters poll.
The mining sector contracted 0.38 percent in the first quarter from the same period a year earlier against a 3.91 percent expansion in October-December 2013, due to restrictions in mineral exports.
2013 marked the first time in four years Indonesia ’s economic growth declined to below 6 percent and analysts said the latest data indicated a pick-up was unlikely.
Capital Economics said in a note that tight monetary policy, along with weak demand for commodity exports, will prevent a bounce-back to the six percent-plus growth rate.
Foreign investment growth - while still at a high rate globally - also slowed to around 5.13 percent in the first quarter of this year, as compared to 5.9 percent in the same period 2013, according to data released last month.
But household consumption - a key driver of the economy - remained robust, growing at 5.61 percent year-on-year.
Experts expect that Indonesia ’s central bank will maintain interest rates at 7.5 percent. The bank also targets an inflation rate of 3.5-5.5 percent this year.-VNA
According to the country’s statistics bureau, the gross domestic product (GDP) in the January-March period expanded 5.21 percent from a year earlier, the slowest pace since the third quarter of 2009 and compared to 5.60 percent forecast in a Reuters poll.
The mining sector contracted 0.38 percent in the first quarter from the same period a year earlier against a 3.91 percent expansion in October-December 2013, due to restrictions in mineral exports.
2013 marked the first time in four years Indonesia ’s economic growth declined to below 6 percent and analysts said the latest data indicated a pick-up was unlikely.
Capital Economics said in a note that tight monetary policy, along with weak demand for commodity exports, will prevent a bounce-back to the six percent-plus growth rate.
Foreign investment growth - while still at a high rate globally - also slowed to around 5.13 percent in the first quarter of this year, as compared to 5.9 percent in the same period 2013, according to data released last month.
But household consumption - a key driver of the economy - remained robust, growing at 5.61 percent year-on-year.
Experts expect that Indonesia ’s central bank will maintain interest rates at 7.5 percent. The bank also targets an inflation rate of 3.5-5.5 percent this year.-VNA
