Indonesian growth in decelerating trend

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Indonesia constructionIndonesia’s economy posted its lowest growth rate during the first quarter of 2013 in over the past two years despite having topped FDI records, exhibiting a mostly declining expansion trend since the last quarter of 2010.

Southeast Asia’s largest economy grew by 6.02 per cent during the first three months of the year, a drop attributed to decreased public investment and consumer consumption. The slowdown being witnessed in China and India, two large trade partners for Indonesia, has also affected the country’s exports, namely the labour-intensive agriculture industry.

This year’s performance marks a contrast compared to the economy’s performance last year, when the country recorded 6.23 per cent.

Indonesia’s economy has been typically boosted by strong all-round investment and domestic consumption, large contributors to diversification, which have in turn insulated the country from slipping into the doldrums of the global financial system.

Consumer spending contributed to almost 55 per cent of GDP, with investment accounting for 33 per cent, Suryamin, the head of Indonesia’s Central Statistics Agency, told media on May 6. He only goes by one name.

However, household consumption increased by just 5.17 per cent at the top of 2013, a shift down form the 5.36 per cent posted in the last quarter of 2012, he mentioned.

Easing growth aside, most investors still remain positive about Indonesia, confidence best supported through the record amount of foreign investment inflows recorded during the first quarter, which came to $6.744 billion.

Half of Indonesia’s 240 million population is under the age of 30, a demographic dividend investors in everything from consumer goods to energy are drawn to. Moreover, the country’s burgeoning middle class is estimated to be approaching 80 million people, one of the fast growing consumer bases in the world, who are now demanding more vehicles, white goods and the like.

But the Philippines recent capture of an investment grade by S&P further highlights the country’s decline. During the same week as the Philippines’ second upgrade, Indonesia’s credit rating by S&P was revised down from “positive” to “stable,” citing bottlenecks in proposed reforms and a greater susceptibility to external pressures.

 

 

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Reading Time: 2 minutes

Indonesia’s economy posted its lowest growth rate during the first quarter of 2013 in over the past two years despite having topped FDI records, exhibiting a mostly declining expansion trend since the last quarter of 2010.

Reading Time: 2 minutes

Indonesia constructionIndonesia’s economy posted its lowest growth rate during the first quarter of 2013 in over the past two years despite having topped FDI records, exhibiting a mostly declining expansion trend since the last quarter of 2010.

Southeast Asia’s largest economy grew by 6.02 per cent during the first three months of the year, a drop attributed to decreased public investment and consumer consumption. The slowdown being witnessed in China and India, two large trade partners for Indonesia, has also affected the country’s exports, namely the labour-intensive agriculture industry.

This year’s performance marks a contrast compared to the economy’s performance last year, when the country recorded 6.23 per cent.

Indonesia’s economy has been typically boosted by strong all-round investment and domestic consumption, large contributors to diversification, which have in turn insulated the country from slipping into the doldrums of the global financial system.

Consumer spending contributed to almost 55 per cent of GDP, with investment accounting for 33 per cent, Suryamin, the head of Indonesia’s Central Statistics Agency, told media on May 6. He only goes by one name.

However, household consumption increased by just 5.17 per cent at the top of 2013, a shift down form the 5.36 per cent posted in the last quarter of 2012, he mentioned.

Easing growth aside, most investors still remain positive about Indonesia, confidence best supported through the record amount of foreign investment inflows recorded during the first quarter, which came to $6.744 billion.

Half of Indonesia’s 240 million population is under the age of 30, a demographic dividend investors in everything from consumer goods to energy are drawn to. Moreover, the country’s burgeoning middle class is estimated to be approaching 80 million people, one of the fast growing consumer bases in the world, who are now demanding more vehicles, white goods and the like.

But the Philippines recent capture of an investment grade by S&P further highlights the country’s decline. During the same week as the Philippines’ second upgrade, Indonesia’s credit rating by S&P was revised down from “positive” to “stable,” citing bottlenecks in proposed reforms and a greater susceptibility to external pressures.

 

 

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