Indonesia sees slowest growth in 4 years

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Java streetIndonesia’s economy in the third quarter grew 5.62 per cent from a the same period year earlier, its slowest pace in nearly four years, as weak exports and consumption dragged on growth in Southeast Asia’s biggest economy, the statistics bureau said on November 6.

The rate was slower than 5.8 per cent in the previous quarter and in line with market expectations. A Reuters poll had projected economic growth of 5.6 per cent from a year earlier, and 2.93 per cent from the previous quarter. Bank Indonesia has a target of 5.5 to 5.9 per cent growth this year.

Indonesia’s trade balance in September 2013 swung back into deficit as softer commodity prices hit exports, likely renewing pressure on the rupiah as it confronts capital outflow risks. Manufacturing activity in September showed moderate improvement helped by strong expansion in production and an increase in new orders. But export orders remained weak, down for the 5th consecutive month.

Meanwhile, domestic demand has been impacted by rising fuel prices and rising interest rates. Fuel prices in the country surged earlier this year after the government removed its subsidy programme. Petrol prices went up by 44 per cent while diesel prices rose by 22 per cent, leading to higher transportation costs and electricity bills.

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Reading Time: 1 minute

Indonesia’s economy in the third quarter grew 5.62 per cent from a the same period year earlier, its slowest pace in nearly four years, as weak exports and consumption dragged on growth in Southeast Asia’s biggest economy, the statistics bureau said on November 6.

Reading Time: 1 minute

Java streetIndonesia’s economy in the third quarter grew 5.62 per cent from a the same period year earlier, its slowest pace in nearly four years, as weak exports and consumption dragged on growth in Southeast Asia’s biggest economy, the statistics bureau said on November 6.

The rate was slower than 5.8 per cent in the previous quarter and in line with market expectations. A Reuters poll had projected economic growth of 5.6 per cent from a year earlier, and 2.93 per cent from the previous quarter. Bank Indonesia has a target of 5.5 to 5.9 per cent growth this year.

Indonesia’s trade balance in September 2013 swung back into deficit as softer commodity prices hit exports, likely renewing pressure on the rupiah as it confronts capital outflow risks. Manufacturing activity in September showed moderate improvement helped by strong expansion in production and an increase in new orders. But export orders remained weak, down for the 5th consecutive month.

Meanwhile, domestic demand has been impacted by rising fuel prices and rising interest rates. Fuel prices in the country surged earlier this year after the government removed its subsidy programme. Petrol prices went up by 44 per cent while diesel prices rose by 22 per cent, leading to higher transportation costs and electricity bills.

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