An oil tanker is docked at a PT Pertamina facility at Tanjung Priok Port in this aerial photograph taken in Jakarta, Indonesia. (Photographer: Dimas Ardian/Bloomberg)  

Indonesia’s Economic Growth Disappoints as Exports Slump

(Bloomberg) -- Indonesia’s economic growth slowed in the first quarter amid a global slowdown that hurt the nation’s exports.

Gross domestic product, the broadest measure of goods and services produced in the economy, rose 5.07 percent in the first quarter from a year ago, lower than the 5.2 percent median estimate in a Bloomberg survey of economists. Compared with the previous quarter, GDP fell 0.52 percent versus an estimated contraction of 0.42 percent.

Indonesia’s Economic Growth Disappoints as Exports Slump

Key Insights

  • Growth in Southeast Asia’s biggest economy has been hovering around 5 percent since 2016, well below the 7 percent targeted by President Joko Widodo when he took office in 2014. The government is forecasting growth of 5.3 percent this year, which would be the fastest pace since 2013
  • Jokowi, as the president is known, is on course to be declared the winner of the April 17 election, although official results are weeks away. He’s seeking to reboot the economy through infrastructure spending in his second five-year term
  • Exports fell about 2 percent in the first quarter from a year ago amid a slowdown in the world economy, dragging down overall GDP growth. Growth in government spending accelerated to 5.2 percent from 4.56 percent in the fourth quarter, while household expenditure was little changed at about 5 percent
  • Bank Indonesia has kept interest rates on hold this year after six hikes last year. Economists are projecting Indonesia will join Asia’s shift to dovish monetary policy with possible rate cuts later this year

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  • There are questions over whether the economy can hit the government’s projections for 2019 amid a slump in manufacturing. Satria Sambijantoro, an economist from PT Bahana Sekuritas in Jakarta, said tax revenue from Indonesia’s manufacturing sector, the largest contributor to GDP and which normally accounts for about a third of total tax revenue, fell almost 9 percent in the first quarter
  • Click here for a breakdown of the GDP numbers

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