With slight economic growth in the first quarter of the year despite massive infrastructure investments and spending to boost consumption, the country is finding additional challenges in the United States’ lust for protectionism and global uncertainties that could nullify such a thin triumph.

Indonesia, a country highly reliant on natural resources, experienced a windfall in the increase of global commodity exports in the first three months of 2017, a situation that several experts said is less likely to happen in the remainder of 2017.

In the first three months of the year, Southeast Asia’s largest country saw 5.01 percent economic growth — higher than the 4.92 percent and 4.71 percent seen in the same period of 2016 and 2015, the Central Statistics Agency (BPS) announced on Friday.

The growth was mainly supported by an increase in exports that according to the agency’s data, grew 8.04 percent and contributed 20.5 percent to gross domestic product (GDP) as commodity prices and the economy of Indonesia’s main trade partners improved. Indonesia ran a surplus with the US of US$13 billion last year, largely via exports of textiles, footwear, fisheries products and natural resources.

BPS head Suhariyanto suggested that the government continue mitigating external risks and challenges, especially the US’ impending protectionist policies that could affect global demand, even though Indonesia’s exports to the US remained positive in the first quarter.

Indonesia may not be able to continue relying on commodity exports as their prices are vulnerable to sentiments in the global market, while uncertainty lingers following fears of a changing constellation in international trade caused by rising protectionism.

“It will be very hard to reach the 6.1 percent growth target in 2018 as increases in commodity prices will not be drastic this year and investment growth next year may be difficult to jump-start,” said SKHA Institute for Global Competitiveness chief economist Eric Sugandi.

The prices of Indonesia’s main export commodies, namely coal and palm oil, have slightly declined since early 2017.

The Australian thermal coal price dropped slightly to $86.37 per metric ton in March 2017, from $89.71 per metric ton in January this year.

Meanwhile, the price of palm oil stood at $663.3 per metric ton in March 2017, lower than the $726.4 per metric ton in January this year.

Aside from the commodity price factor, the economy is unlikely to get any further monetary policy support as Bank Indonesia (BI) cut interest rates six times last year, Gareth Leather, senior Asia economist at London-based Capital Economics, wrote in a research note.

BI will unlikely continue its monetary easing if the US Federal Reserve raises rates further than markets currently expect this year, slowing down credit growth even further and forcing the economy to stay flat at the current pace in 2017 and 2018, he added.

“Looking ahead, with commodity prices likely to stay relatively depressed and credit growth set to remain weak, we expect growth to remain stuck at around 5 percent over the next couple of years,” Leather wrote.

On the positive note, investment expanded 4.81 percent in the first three months, higher than the 4.24 percent seen in the same period last year. The government’s spending stood at 2.71 percent, lower than the 2.93 percent in the first quarter of 2016.

Meanwhile, consumption — which is the biggest contributor to Indonesian GDP with almost 57 percent — remained almost flat at 4.93 percent in the first quarter compared to 4.94 percent in the same period of 2016 due to the effect of rising administered prices, particularly in electricity.

As the government cuts electricity subsidies to manage the budget deficit, the third electricity price hike will be carried out this month for 900 volt-ampere (VA) consumers following increases in January and March that have contributed to some inflationary pressures.

“Household consumption growth will be hampered if the government continues to increase administered prices. The price increase was one of the causes of people’s weakened purchasing power,” said Eric.

According to Indonesian Employers Association (Apindo) chairman Hariyadi Sukamdani, the government should also maintain a positive outlook if it wants to reduce investor doubt amid current political tension, which had also weakened domestic demand.

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