Indonesia 's economy grew at its slowest in four years in the firstquarter as a mineral export ban, successive interest rate rises anduncertainty over upcoming presidential elections unnerved investors.
According to the country’s statistics bureau, the grossdomestic product (GDP) in the January-March period expanded 5.21 percentfrom a year earlier, the slowest pace since the third quarter of 2009and compared to 5.60 percent forecast in a Reuters poll.
Themining sector contracted 0.38 percent in the first quarter from the sameperiod a year earlier against a 3.91 percent expansion inOctober-December 2013, due to restrictions in mineral exports.
2013 marked the first time in four years Indonesia ’s economicgrowth declined to below 6 percent and analysts said the latest dataindicated a pick-up was unlikely.
Capital Economics said in anote that tight monetary policy, along with weak demand for commodityexports, will prevent a bounce-back to the six percent-plus growth rate.
Foreigninvestment growth - while still at a high rate globally - also slowedto around 5.13 percent in the first quarter of this year, as compared to5.9 percent in the same period 2013, according to data released lastmonth.
But household consumption - a key driver of the economy - remained robust, growing at 5.61 percent year-on-year.
Experts expect that Indonesia ’s central bank will maintain interestrates at 7.5 percent. The bank also targets an inflation rate of3.5-5.5 percent this year.-VNA
According to the country’s statistics bureau, the grossdomestic product (GDP) in the January-March period expanded 5.21 percentfrom a year earlier, the slowest pace since the third quarter of 2009and compared to 5.60 percent forecast in a Reuters poll.
Themining sector contracted 0.38 percent in the first quarter from the sameperiod a year earlier against a 3.91 percent expansion inOctober-December 2013, due to restrictions in mineral exports.
2013 marked the first time in four years Indonesia ’s economicgrowth declined to below 6 percent and analysts said the latest dataindicated a pick-up was unlikely.
Capital Economics said in anote that tight monetary policy, along with weak demand for commodityexports, will prevent a bounce-back to the six percent-plus growth rate.
Foreigninvestment growth - while still at a high rate globally - also slowedto around 5.13 percent in the first quarter of this year, as compared to5.9 percent in the same period 2013, according to data released lastmonth.
But household consumption - a key driver of the economy - remained robust, growing at 5.61 percent year-on-year.
Experts expect that Indonesia ’s central bank will maintain interestrates at 7.5 percent. The bank also targets an inflation rate of3.5-5.5 percent this year.-VNA
