JAKARTA: Indonesia’s economy grew slower than expected in the first quarter, official data showed Monday (May 6), as exports contracted for the first time since 2016 owing to softer demand for key commodities.
Southeast Asia’s biggest economy expanded 5.07 per cent in January-March, nearly flat from a year earlier and missing market estimates of 5.18 per cent.
An uptick in government and household spending buoyed growth, but imports and exports fell from a year ago while gross domestic product declined from the last quarter of 2018, the statistics agency said.
The commodities-driven economy has been faced with widening trade deficits and rocky global demand for export drivers like palm oil and coal.
“Exports are likely to remain weak,” research house Capital Economics said in a report after the figures were published.
“We expect global growth to soften a bit further over the coming quarters and for the prices of Indonesia?s main commodities exports, coal and palm oil, to remain subdued,” it added.
The data come several weeks after Indonesia held polls that saw President Joko Widodo elected to a second term, according to unofficial results. Official figures are due this month.
Widodo leaned heavily on a multi-billion-dollar infrastructure push, including Jakarta’s first mass-rapid-transit system, in the campaign.
However, his administration has seen annual growth hover around five percent a year, well short of earlier pledges to hit seven percent despite the huge infrastructure building blitz and stimulus packages.