Indonesia Q3 growth expands slightly to 5.06 percent

 06 Nov 2017 - 12:09

Indonesia Q3 growth expands slightly to 5.06 percent

AFP

Jakarta: Indonesia's economy grew more slowly than expected in the third quarter, dimming hopes that a high-profile drive to boost Southeast Asia's biggest economy will hit its GDP target this year.

The economy expanded 5.06 percent in the July-September period from a year ago, a little below market expectations and off the government's target of 5.2 percent growth for 2017.

President Joko Widodo came to power in 2014 on a pledge to boost annual growth to seven percent annually but his government has struggled to rev up the commodities-driven economy.

Growth has remained stuck at around five percent for the past three years and the latest result was unlikely to signify the start of a sustained recovery, according to London-based consultancy Capital Economics.

"Given the mounting headwinds facing the economy, we expect growth to come in at around five percent over the next couple of years," Gareth Leather, a senior Asia economist at the research house, said in a commentary.

The government's statistics agency pointed to an expansion in the services sector as well as exports, which rose 17.27 percent year-on-year.

Information and communications sectors, and the storage industry, were also key drivers, it said.

"This growth is heartening because the 5.06 percent figure is higher than the first and second quarters. This increase is quite significant," said Suhariyanto, head of the Indonesian Central Statistics Bureau, who like many Indonesians goes by one name.

In a bid to accelerate growth the central bank has slashed interest rates seven times in the last year -- including an unexpected drop to 4.5 percent from 4.75 per cent in August -- and Widodo has announced a series of economic stimulus packages.

Household spending, which accounts for more than half of Indonesian GDP, grew 4.94 percent on-year, but at a slower pace than in quarter three 2016.