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Indonesia’s Q3 Growth Slows to 5%

Indonesia’s Q3 Growth Slows to 5%Indonesia’s Q3 Growth Slows to 5%

Indonesia’s economy grew in line with economists’ forecasts in the third quarter as President Joko Widodo seeks to spur the nation onto a higher growth path.

Gross domestic product increased 5.02% last quarter from a year earlier, compared with a revised 5.19% in the second quarter, the statistics bureau said in Jakarta on Monday.

The median estimate of 22 economists surveyed by Bloomberg was for growth of 5.08%.

GDP rose 3.2% in the third quarter from the previous three months, compared with a median estimate of 3.25% in a Bloomberg survey.

Southeast Asia’s biggest economy has been undershooting the 7% growth target set by Widodo when he took office two years ago, mainly due to low commodity prices and weaker global demand.

Jokowi, as the president is known, is seeking billions of dollars to help fund an ambitious infrastructure agenda that includes building roads, railways and seaports. He said last week the government has now set its sights on growth of more than 6% in 2018 and a 10% boost in investment.

Also helping to support the growth outlook are six interest rate cuts by Bank Indonesia this year to spur spending as inflation remains inside the 3% to 5% target band.

Oliver Jones, an economist at Capital Economics in London, said growth is likely to remain “stuck around the 5% mark for the next few years”.

“While we don’t expect growth to weaken any further, with fiscal and monetary policy unlikely to provide much more support, a significant revival also looks unlikely,” he said in an e-mail.

 

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