Indonesia says economy slowed in 2012
JAKARTA (AFP) – Indonesia said Tuesday that growth in Southeast Asia’s biggest economy slowed in 2012 from the previous year owing to
global headwinds, but was supported by strong domestic consumption and investment.
The slip, from 6.5 per cent expansion seen in 2011 year and below Jakarta’s 6.3 per cent forecast, came as the country also recorded its first trade deficit owing to a fall in demand for exports from key markets such as China and India.
The Central Statistics Agency also said growth in the final three months of the year came in at just 6.11 per cent year on year, while on a quarterly basis it contracted 1.45 per cent.
Agency chief Suryamin, who goes by one name, said the weaker-than-expected data was “due to the ongoing global crisis and because of (Indonesia’s) trade deficit”.
However, the growth rate is “still the third strongest in Asia after China and the Philippines”, Robert Prior-Wandesforde, director of Asian economics for Crédit Suisse in Singapore told AFP.
The country’s resilience has been attributed to its driving domestic
consumption, which accounts for about 60 per cent of gorss domestic product.
Purbaya Yudhi Sadewa of Jakarta-based Danareksa Research Institute, said: “I think we will still see investment flowing in this year because, compared to the countries in the region, Indonesia is still promising for investors.” Sadewa predicted growth of 6.5 per cent this year.
Despite the weakness seen at the end of the year analysts said they were still hopeful for the next 12 months.
“The figures, despite lower than we thought, are not worrying because it is still tolerable,” Bank Internasional Indonesia chief economist Juniman said. Juniman, who goes by one name, also expects the economy to grow 6.5 per cent this year.
The central bank forecasts that the growth this year will reach between 6.3 and 6.7 per cent.
Tuesday’s figures come on the back of a string of results from around the region that have showed a slowdown from the previous year.
Even China’s huge economy expanded at its slowest pace in 13 years, while India’s central bank has tipped 5.5 per cent growth this year, from 6.2 per cent in the year to March 2012, and 9.3 per cent previously.
The weakness in China and India – big buyers of Indonesian coal and oil – also had a knock-on effect for Jakarta, which saw exports slide 6.61 per cent, leading to the country’s first ever trade deficit.