Dip in consumption, commodity prices hit Indonesia 2Q growth
JAKARTA: Indonesia’s economy grew a slower-than-expected 5.01 per cent in the second quarter (2Q) as a dip in household consumption and a slowdown in key commodity prices hit the resource-rich country, data released Monday showed.
The year-on-year expansion was unchanged from the first quarter but below the government target of 5.2 per cent growth for 2017.
“We have to admit that the 5.01 per cent growth is below our expectation, but I’d say it’s still quite good considering the global economic conditions and the decreasing commodity prices,” Suhariyanto, the head of Indonesia’s Central Statistics Bureau, said.
President Joko Widodo came to power in 2014 on a pledge to boost economic expansion to seven per cent but his government has struggled to lift growth rates in Southeast Asia’s largest economy, which is rich in resources but has suffered from a slump in commodity prices.
Household consumption, which accounts for more than half of Indonesian gross domestic product (GDP), was the main driver of growth, expanding 4.95 per cent per cent year-on-year but down from the 5.07 per cent growth seen in the second quarter last year.
Growth in trade dipped, due to a slowdown in domestic goods production and the supply of imported goods, Suhariyanto said.
Capital Economics described the result as another disappointing quarter for Indonesia.
“Looking ahead, we see little prospects of a sustained recovery,” Gareth Leather, senior Asia economist at the consultancy, said. — AFP