Indonesia’s economy grew in line with economists’ forecasts in the third quarter, as President Joko Widodo seeks to spur the nation onto a higher growth path.
GDP increased 5.02 percent in the third quarter from a year earlier, compared with a revised 5.19 percent in the second quarter, the statistics bureau said in Jakarta on Monday. The median estimate of 22 economists surveyed by Bloomberg was for growth of 5.08 percent. GDP rose 3.2 percent in the third quarter from the previous three months, compared with a median estimate of 3.25 percent in a Bloomberg survey.
Big picture
Southeast Asia’s biggest economy has been undershooting the 7-percent growth target set by Widodo when he took office two years ago, mainly due to low commodity prices and weaker global demand. Jokowi, as the president is known, is seeking
billions of dollars to help fund an ambitious infrastructure agenda that includes building roads, railways and seaports. He said last week the government has now set its sights on growth of more than 6 percent in 2018 and a 10-percent boost in investment. Also helping to support the growth outlook are six interest-rate cuts by Bank Indonesia this year to spur spending, as inflation remains inside the 3-percent to 5-percent target band.
Economist takeaways
“What’s lacking in the economy is private investment at this juncture,” Gundy Cahyadi, an economist at DBS Group Holdings Ltd. in Singapore, said in a note before the data was released. “Overall investment growth has recovered, but only at a gradual pace, and still some distance away from the 7 percent to 8 percent that we think it is capable of.”
Government spending was 439.7 trillion rupiah in the third quarter compared with 484.8 trillion rupiah a year ago.