Indonesia Q3 growth slips to 5.02pc
SLUMP: Slowdown in trading partners may affect chance of rebound next year
INDONESIA’S economic growth weakened in the third quarter (Q3), hurt by a slowdown in major trading partners and a slump in government spending, suggesting the economy could struggle to mount a solid rebound over the next year.
Southeast Asia’s largest economy grew 5.02 per cent on an annual basis in July-September, said the statistics bureau yesterday, broadly in line with expectations in a Reuters poll, but slower than the 5.19 per cent in the second quarter.
The Q3 result puts Indonesia further away from President Joko Widodo’s ambitious seven per cent growth pledge, a goal he announced when campaigning for the presidency in 2014 only to see it pushed into the distance by slow reforms, red tape and weak global demand.
A contraction in exports deepened to six per cent in Q3, from the 2.73 per cent slump in the previous quarter, due to slowing growth in China, Singapore and South Korea, said head of the bureau Suhariyanto.
giants for customers. was fierce, said Li, and he was taking full responsibility for what he called a “misunderstanding”. “Baidu is the company that trained me and the house I grew up in,” said Li in the posting. “(I) never ever thought of doing anything immoral.”
Meanwhile, Baidu is seeking to raise as much as US$500 million (RM20.2 billion) for its Waimai food delivery unit amid a costly battle with other Chinese Internet giants for customers, according to people familiar with the matter.
The company was looking for at least US$300 million and the funding round hadn’t been finalised, said the people.
Using scooters to supply everything from Starbucks coffee to sliced sashimi, Waimai is in a pitched battle with rivals to sign up delivery men and convince restaurants to
Government spending tumbled 45 trillion rupiah (RM14.49 billion) during July-September from the same period last year, the data showed. Faced with a significant budget shortfall, Indonesia’s finance minister announced a US$10.2 billion (RM42.98 billion) budget cut for the whole of this year in August.
Still, it’s not all doom and gloom. Many analysts argue additional revenue collection from the government’s flagship tax amnesty, which generated 98 trillion rupiah in state join its service.
Baidu is up against Ele.me, which scored a US$1.25 billion investment from Alibaba Group Holding Ltd, and the Meituan-Dianping business backed by Tencent Holdings Ltd.
Heavy investment in the onlineto-offline, or O2O market, has driven up costs as companies pay subsidies to build out their services and win market share.
The battle for customers has become increasingly hostile. In August, Baidu sued Tencent and Sohu.com Inc over a spate of articles it said defamed Waimai by purporting to expose poor hygiene at restaurants on its service.
While Baidu is often grouped with its rivals as the triumvirate of China’s Web companies, it has fallen out of favour with investors. The company had a market value of US$58 billion through Friday, compared with about US$240 billion for both Tencent and Alibaba. Agencies revenue, could help cushion the economy from aggressive state spending cuts.
Prices of palm oil and mining products like coal and nickel have risen in recent months. The benefits were seen in the mining sector returning to growth in the JuneSeptember period after shrinking for six consecutive quarters.
Household consumption, which accounts for more than half of Indonesia’s gross domestic product, also remained solid in the Q3, possibly helped by Bank Indonesia’s six
interest rate cuts this year.
A few days after a surprise rate cut last month, Bank Indonesia (BI) governor Agus Martowardojo said the easing bias would remain in place in a sign the central bank could add to the 150 basis points of cuts delivered this year.
However, with the prospect of rising United States interest rates and a presidential election there hurting the rupiah, said Aldian Taloputra, Standard Chartered economist, BI might want to stay on hold until year-end. Reuters