A corner of Jakarta (Photo: nowjakarta.co.id) Hanoi (VNA) – Indonesia’s economy expanded 5.27 percent in the secondquarter of 2018, the highest growth rate since the fourth quarter of 2013,thanks to growing domestic consumption.
Statisticsreleased on August 6 showed that the economic growth of Southeast Asia’slargest economy in the second quarter is higher than the figure of 5.06 percentrecorded in the first quarter of 2018.
However,there are factors that are likely to hinder Indonesia’s economic growth such ashigher US interest rates and adverse impacts from the US-China trade war whichmight affect the Southeast Asian country’s exports.
Householdconsumption, which accounts for more than half of Indonesia’s gross domesticproduct (GDP), grew 5.14 percent as compared to the same period last year.
Meanwhile,the growth of investment – the second biggest growth driving force ofIndonesia, slowed down to 5.87 percent in the second quarter of 2018 aftersurging over 7 percent in the three previous quarters.
TheIndonesian government is reviewing the import of production materials andinfrastructure projects in a bid to narrow the current account.
CapitalEconomics said that Indonesia is not likely to maintain a high growth pace likein the second quarter as its salary hike may spur household consumption but italso can cause headwinds.
Thefalling global demand for dropping prices of key export staples such as coaland palm oil will also affect Indonesia’s export revenues.-VNA
VNA
