Indonesia’s economic growth is expected to have cooled in the third quarter due to slow private investment and a cut in government spending, indicating that Southeast Asia’s largest economy is struggling to mount a strong rebound.
The median forecast of 12 analysts in a Reuters poll was for gross domestic product growth of 5.04 percent in July-September year-on-year, below the 5.18 percent reported for the previous quarter. The data is due on Monday, Nov. 7.
Indonesia’s central bank has slashed its benchmark policy rate six times this year, by a total of 150 basis points, in an effort to lift growth.
The resources-dependent economy grew 4.79 percent last year, its weakest since 2009, pressured by lower international commodity prices, slower growth in China, tepid foreign investment and infrastructure bottlenecks. The pace of growth has slowed in each of the past five years.
Bank Indonesia last month said third quarter growth may have not been as strong as it initially expected, and cut its forecast to 5 percent from an earlier view of 5.2 percent.
BI said annual economic growth may track near the bottom of its 4.9-5.3 percent outlook for full-year 2016, compared with analysts’ median forecast in the poll of 5.09 percent.
In Reuters’ previous survey in August, analysts had tipped 2016 growth of 5.04 percent.
source: jakartaglobe.beritasatu /reuters