Indonesia's GDP Growth Likely at 5.1% in Q1: DBS Bank
Jakarta. Indonesia's economic growth rate likely accelerated in the first quarter of this year, as increased government infrastructure spending and a slight uptick in consumer spending compensated for lower investment and exports, DBS Bank estimates.
Indonesia's gross domestic product likely expanded by 5.1 percent in the January to March period, compared with the same period last year, Gundy Cahyadi, a Singapore-based economist at DBS Bank, said in a statement on Tuesday (26/04).
Southeast Asia's largest economy has been accelerating in the past two quarters, registering 4.7 percent growth in third quarter last year, and 5.04 percent in the year's final quarter.
The Central Statistics Agency (BPS) will announce the GDP growth figure on May 5.
"Most in the market expect GDP growth to stay above 5 percent in the period," Gundy said. "Not only has the government stepped up its budget disbursement but there has been some evidence of stronger consumption growth as well."
The government spent Rp 391 trillion ($29 billion) in the first three months of this year, up 6.3 percent from the same period last year, thanks to early spending on infrastructure projects.
Motorcycle sales, a leading indicator of private consumption that account for half of the country's economy, rose 3.4 percent in March – the first time in seven months. The government has been trying to prop up consumption by cutting fuel and electricity prices, and by ordering state-owned banks to cut their lending rates.
Still, the sales of cement and four-wheelers — other indicators of private consumption — remained weak, as consumers postponed purchases of big-ticket items such as houses and cars.
Gundy noted that the imports of machinery and other capital goods have shrunk by 18 percent, a signal that investment growth may have moderated in the first three months.
Indonesia's exports were also lower 14 percent, with coal and palm-oil sales remaining under pressure due to lower global demand, BPS data showed.
The government and Bank Indonesia, the country's central bank, earlier announced that the Indonesian economy would likely grow by at least 5.1 percent in the first quarter.
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