KPL
(KPL/VNA) Indonesia's economy, the largest in Southeast Asia, expanded 5.11% in the first quarter of this year as compared to the figure of 5.04% recorded in the same time last year, and economists’ expectation of 5%.
(KPL/VNA) Indonesia's economy, the largest in
Southeast Asia, expanded 5.11% in the first quarter of this year as compared to
the figure of 5.04% recorded in the same time last year, and economists’
expectation of 5%.
The result was attributed to high government
spending ahead of the country’s presidential election in February, and
household spending in preparation for the holy month of Ramadan and Eid al-Fitr
in April.
During the three-month period, government
spending jumped nearly 20% annually, versus a growth rate of just 2.81% in the
previous three months, with higher spending for election and welfare programmes
to help the poor cope with high food prices.
Meanwhile, household spending grew 4.91% on a
yearly basis, compared to a 4.47% expansion in the previous quarter. Household
consumption makes up over half of Indonesia's GDP.
Investment growth, however, slipped to 3.79%
in January-March, from 5.02% in the fourth quarter.
Gareth Leather, an economist at the Capital
Economics, held that the economy is set to struggle over the coming quarters as
high interest rates, lower commodity prices and below-trend growth weigh on
demand.
Rate hikes by Bank Indonesia (BI) included a
surprise move last month to step up support for the rupiah currency, which has
fallen to four-year lows amid global market volatility.
DBS Bank economist Radhika Rao said BI would
keep the door open to further tightening should the rupiah fall further,
predicting 5% full-year growth for the economy.
KPL