Indonesia’s economic growth missed analysts’ estimates last quarter, weakening to the slowest pace since 2009 after interest-rate increases last year curbed investment and a mineral-ore ban hurt the mining industry.
Gross domestic product rose 5.21 percent in the three months ended March 31 from a year earlier, the Central Bureau of Statistics said in Jakarta today. That compared with a median estimate of 5.59 percent in a Bloomberg survey of 15 economists.
The government last month said it plans to cut its budget forecast for GDP growth in 2014 to 5.8 percent from an earlier assumption of 6 percent. The most aggressive rate-tightening cycle in eight years in 2013 helped rein in a current-account gap and cooled inflation in Southeast Asia’s largest economy.
“Tight monetary policy, along with weak demand for commodity exports, will prevent a bounce-back to the 6 percent-plus growth rates that not long ago looked like the norm,” Daniel Martin, a Singapore-based economist at Capital Economics Asia Pte, wrote in an e-mail after the data.
The rupiah traded little changed at 11,518 per dollar at 16:42 p.m. in Jakarta, according to prices from local banks. It’s the biggest gainer this year among widely-traded Asian currencies tracked by Bloomberg. One-month rupiah forwards and the Jakarta Composite Index (JCI) both pared gains after the data.
Indonesia’s GDP rose 0.95 percent last quarter from the previous three months. That compared with a median estimate for 1.33 percent growth in a Bloomberg survey.
Mining and quarrying in the first quarter contracted 3.57 percent from the previous three months and 0.38 percent from a year earlier, the agency said. Indonesia, the world’s biggest shipper of mined nickel, banned exports of raw mineral ores from Jan. 12.
China’s economic slowdown is weighing on the outlook for Indonesia’s exports even as the trade balance improves, Finance Minister Chatib Basri said May 2 in an interview with Bloomberg News in Astana, Kazakhstan, where he was attending the Asian Development Bank’s annual meeting.
Investment in the first quarter grew 14.6 percent from a year earlier, slower than last year’s 27 percent, government data showed on April 24. The country’s Financial Services Authority has a bank lending target of about 16 percent to 17 percent for 2014, compared with 22 percent last year, Chairman Muliaman Hadad said on April 4.
Household consumption grew 5.61 percent from a year earlier, the statistics agency said.
“The one bright spot for the economy is likely to be consumer spending,” Martin said.
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