JAKARTA • Indonesia's economic growth picked up a touch in the first quarter on firmer export prices of some commodities and stronger demand from major trading partners, though analysts were split on how far this momentum would carry through to the rest of the year.
South-east Asia's largest economy grew 5.01 per cent in the January-March period on an annual basis, the country's statistics bureau said yesterday, up from 4.94 per cent in the preceding quarter.
The resource-rich country has struggled through years of slowing growth as a plunge in commodity prices has hurt everything from exports to investment to people's purchasing power.
The recovery in prices of some of Indonesia's main commodities, such as palm oil and coal, helped economic growth pick up to 5.02 per cent last year, from 4.79 per cent in 2015.
In the first quarter, exports of goods and services rose more than 8 per cent. The head of the statistics bureau, Mr Suhariyanto, attributed this to rising prices of commodities such as tea and shrimp. Demand was also supported by slightly better economic growth in China, the United States and Singapore - Indonesia's major trading partners.
"This is promising and in line with growth in our export partners," Mr Suhariyanto, who goes by one name, told a briefing.
Consultancy Capital Economics described the first-quarter performance as disappointing, and Natwest Markets said it was sub-potential. But Standard Chartered and local brokerage Samuel Sekuritas were more upbeat and suggested it pointed to better readings in the coming quarters.
"It was an externally driven recovery in line with our expectation. We see growth improving in the future as the government spends more," said Standard Chartered economist Aldian Taloputra, who expects export gains to feed through to investment and consumption.
Indonesian Finance Minister Sri Mulyani Indrawati told Reuters last month that there would be no more spending cuts this year as revenue collection was on track, and this year's gross domestic product growth was likely to top the official target of 5.1 per cent.