Indonesia misses economic growth forecasts in Q1

Indonesia misses economic growth forecasts in Q1

FILE PHOTO: Workers unload oil palm fruits in a state-owned crude palm oil processing unit in North Sumatra May 29, 2012. (Reuters)
FILE PHOTO: Workers unload oil palm fruits in a state-owned crude palm oil processing unit in North Sumatra May 29, 2012. (Reuters)

JAKARTA: Indonesia's economy grew slower than expected in the first quarter, official data showed Monday, as exports contracted for the first time since 2016 owing to softer demand for key commodities.

Southeast Asia's biggest economy expanded 5.07% in January-March, nearly flat from a year earlier and missing market estimates of 5.18%.

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 5% a year, well short of earlier pledges to hit 7% despite the huge infrastructure building blitz and stimulus packages.


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