Indonesia’s economy has slowed down slightly in the third quarter of 2018, lower than the previous quarter’s growth due to capital outflows, weaker exports, and household spending (Source: Reuters)
Hanoi (VNA) – Indonesia’s economy has slowed down slightlyin the third quarter of 2018, lower than the previous quarter’s growth due to capital outflows, weakerexports, and household spending.
Data released by the Statistics Indonesia (BPS) on November 5 showedthat the country’s gross domestic product (GDP) during the July-September periodexpanded by 5.17 percent compared to the previous year’s period, slightly higherthan the 5.15 percent expected in a Reuters’ poll. Meanwhile, the preceding April-Juneperiod had the fastest quarter growth rate since 2013.
The slowdown was largely due to softer household consumption inthe third quarter and a negative contribution from foreign trade. Although theexpansion was a notch faster than expected, economists warn the growth mayweaken further.
Fakhrul Fulvian, chief economist of Jakarta-based TrimegahSecurities, said that the growth of the global economy, and Indonesia inparticular, will tend towards a slower pace in the near future due the impactof a weakening rupiah. He expects Indonesia’s GDP to grow 5.13 percent in 2018and 5 percent in 2019.
The rupiah is down around 9 percent this year, making it thesecond worst performing currency among emerging Asian markets.
Though a weaker currency has not stoked inflation, Indonesia’scentral bank has raised interest rates five times since May to slow capitaloutflows, in a measure analysts say could dampen domestic demand.
Alex Holmes, Capital Economics analyst for emerging Asia, alsopredicted that Indonesian growth will probably stay at around 5 percent overthe next couple of years.
While the Indonesian Government’s official GDP growth targetthis year is 5.4 percent, Finance Minister Sri Mulyani Indrawati last monthtold parliament that the growth for 2018 was more likely to be 5.14 percent.-VNA
