Indonesia defends economic data against doubters

Indonesian Finance Minister Sri Mulyani Indrawati said "the government never intervenes in the statistics".
Indonesian Finance Minister Sri Mulyani Indrawati said "the government never intervenes in the statistics".

JAKARTA • Indonesia's Finance Minister Sri Mulyani Indrawati defended the nation's statistics, saying there was no manipulation of the economic growth figures, after some analysts questioned the unusual stability of the data.

"The government never intervenes in the statistics," Ms Indrawati said in a telephone interview from Dubai in the United Arab Emirates on Wednesday.

Statistics Indonesia (BPS), which conducts the polls, is independent and "quite reputable", she added.

Data on Tuesday showed the economy expanded 5.02 per cent in the third quarter from a year ago, little changed from 5.05 per cent in the second quarter and 5.07 per cent in the first three months of the year. Growth has been fairly steady, around 5 per cent for several years, prompting some economists, such as Mr Gareth Leather of Capital Economics, to question the figures.

Ms Indrawati said growth has held above 5 per cent in recent years because household consumption, which accounts for 56 per cent of the economy, has been growing more than 5 per cent. With imports sharply contracting in the third quarter, net exports turned positive, boosting overall growth, she added.

She said she has encouraged BPS to invite global institutions to review its methodologies and there are probably consumption activities taking place online that are not being captured in the data.

"We are very open, we are very transparent about data, and we have never had a track record of fabricating data, whether in terms of inflation, GDP (gross domestic product) or unemployment," she said. "Indonesia, in this era of openness, it's impossible for us to think about fabricating the data."

The questions raised by some analysts about the nation's statistics are unreasonable and would "erode the confidence of our economic growth and policies", she said, adding: "I take it very seriously."

She said the economy will probably expand 5.05 per cent this year, down from a revised forecast of 5.08 per cent. Interest rates are also still attractive compared with low yields elsewhere, making Indonesia a favoured destination for foreign investors, she added.

She said she was concerned by the slowdown in investment and government spending in the last quarter, as well as the contraction in imports, which may indicate a drop in capital goods purchases and, therefore, a further slide in investment. Growth may rebound in the fourth quarter with the new Cabinet under President Joko Widodo expected to accelerate government spending, she said.

"Based on seasonal pattern, consumption will be more positive in the fourth quarter. And we expect there will be more positive responses in investment with the presence of a new government."

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on November 08, 2019, with the headline 'Indonesia defends economic data against doubters'. Print Edition | Subscribe