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Indonesia's Q1 economy runs slower than expected
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President Joko “Jokowi” Widodo chairs a limited Cabinet meeting to discuss economic issues at the Presidential Office in Jakarta in January. Vice President Jusuf Kalla (right), (from left to right) head of the Financial Services Authority’s (OJK) board of commissioners, Muliaman D. Hadad, Finance Minister Bambang Brodjonegoro as well as Bank Indonesia Governor Agus Martowardojo also attended the meeting to discuss economic issues.
(Antara/Widodo S. Jusuf)
T
he Indonesian economy expanded by only 4.92 percent year-on-year (yoy) in the first quarter of this year, lower than 5.04 percent in the previous quarter.
Private consumption, weighing in at more than 58 percent of the gross domestic product (GDP) value in the period, expanded 4.94 percent, another below-5-percent growth. Investment expanded 4.24 percent while government spending grew by only 2.93 percent yoy versus 7.31 percent recorded in the previous quarter.
However, this year's start was better than that of the same period last year when the economy grew by 4.73 percent yoy, said Central Statistic Agency (BPS) head Suryamin when announcing the GDP growth at his office in Central Jakarta on Wednesday.
Suryamin quickly brushed-off concerns about the economy, saying that this quarter’s situation was not an apple-to-apple comparison to the previous one when businesses and government spending had picked up pace.
"Economic activities have just started in the first quarter," he said, adding that the economy started moving faster in the second and third quarter thanks to holiday celebrations and government spending.
The first quarter figure is well below analysts and the government's projection. Bank Indonesia (BI) expects to see the economy expand 5.1 percent this quarter, while analysts and the market project growth of between 5.01 percent and 5.2 percent.
The headline number came in below market expectations, DBS Bank economist Gundy Cahyadi admitted.
"Investment growth is the key downside risk to our GDP growth forecast this year, especially since private sector investment is not expected to recover by much until we are in the second half of this year," he wrote in a research note.
He penciled in 5.2 percent full-year growth, slightly below the government's target of 5.3 percent.
Indonesia's economy, the largest in the Southeast Asia, expanded by only 4.8 percent last year, the slowest since the 2009 financial crisis. (dmr)
