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Weak spending curbs Q3 growth
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Slower growth: A bank employee counts and checks banknotes in Jakarta on Sept.26. The Central Statistics Agency (BPS) said Indonesia's economy grew at a slower-than-expected pace in the third quarter due to weak spending. (Antara Photo/Muhammad Adimaja)
I
ndonesia’s economy grew at a slower-than-expected pace in the third quarter as household consumption cooled, raising doubts about whether the full year expansion target can be achieved.
Gross domestic product (GDP) expanded 5.06 percent over the July-September period after expanding by 5.01 percent in both the first and second quarters, the Central Statistics Agency (BPS) on Monday.
As a consequence, the country’s growth after the first nine months of this year sat at 5.03 percent, a far cry from the targeted 5.2 percent in the revised 2017 state budget and the 5.17 percent projected by Finance Minister Sri Mulyani Indrawati.
Household consumption, which accounts for more than half of the GDP, expanded at its lowest rate this year, 4.93 percent yearon-year (yoy), in the third quarter.
Instead, quarterly growth relied on investment, exports and imports, which soared by 7.11 percent, 17.27 percent and 15.09 percent, respectively, while government spending expanded by 3.46 percent.
The growth in both private and government spending was below expectations, said Bank Central Asia (BCA) chief economist David Sumual, who had projected household consumption and government expenditure to surge by 5.03 percent and 4 percent, respectively, in the third quarter.
“There’s a need to convince consumers to spend again, as it seems that presently they just wait and see,” he said.
