Indonesia's GDP growth disappoints as economy expands 5.06%

Indonesia's economy expanded at a slower pace in the third quarter than economists expected.
Indonesia's economy expanded at a slower pace in the third quarter than economists expected. PHOTO: REUTERS

JAKARTA (BLOOMBERG) - Indonesia's economy expanded at a slower pace in the third quarter than economists expected, a disappointing outcome for the government as it struggles to boost growth in South-east Asia's largest economy.

Gross domestic product rose 5.06 per cent from a year earlier, according to data released by the statistics bureau on Monday (Nov 6). The median estimate of 17 economists in a survey was for growth of 5.2 per cent.

The economy grew 3.18 per cent from the previous quarter, missing economists' projection of a 3.2 per cent gain.

Indonesia's economy has expanded at an average of about 5 per cent over the past five years, with government officials, including Finance Minister Sri Mulyani Indrawati, striking a more upbeat tone on the growth outlook.

A rebound in commodity prices that has helped deliver double-digit growth in exports for most of the year, combined with a surge in investment, suggests the economy is picking up steam. On the downside, consumer spending and credit growth has remained muted even after eight rate cuts since the beginning of last year.

Total exports rose 17 per cent in the third quarter from a year earlier, with shipments of merchandise goods climbing 24 per cent. Investment was up 7 per cent while the unemployment rate fell to 5.5 per cent in August from 5.61 per cent in same period last year.