Indonesia’s GDP is reported to have grown slower than expected in the first quarter as commodities prices fell, according to data from Statistics Indonesia. With the country being a major exporter of palm oil and coal, the drop in prices has affected the economy this year.
Although Indonesia is Southeast Asia’s largest economy, it expanded only 5.07 percent in January to March. This reflects a slowdown from the previous year. Analysts polled by Reuters had expected a growth rate of 5.18 percent.
In the first quarter, the economy’s GDP shrunk 0.52 percent on a quarterly, non-seasonal adjusted basis. For this year, the official government growth forecast is 5.3 percent and the Central Bank’s forecast ranges between 5.0 and 5.4 percent.
Economists at HSBC on Monday had said that weaker investment could be one of the factors impacting the GDP rise. Economists Joseph Incalcaterra and Maitreyi Das wrote, “The strong public infrastructure investment cycle has slowed and may only pick back up in 2020.”
Compared to the previous year, both private consumption and government expenditure increased in a measly manner on a constant-price based, Reuters reported.
Senior Asia economist Gareth Leather on Monday raised concerns whether the official figures are reliable because the growth rate has been ‘suspiciously stable at around 5 percent over the last few years’.
Last year, Indonesia’s GDP growth had beaten analysts expectations.