Aditya Suharmoko, The Jakarta Post, Jakarta
The economy grew at a lesser rate in the first quarter of 2008, compared to in last year's fourth quarter, on a slower growth in investment and consumption amid rising inflation and a global economic slowdown, Bank Indonesia (BI) said Monday.
In its quarterly assessment, BI estimated the economy had grown 6.1 percent in the first three months of 2008, lower than the government's estimate of between 6.2 and 6.3 percent.
"Slow investment and private consumption growth contributed to a slower economic growth in the first quarter of 2008," BI senior deputy governor Miranda Swaray Goeltom said in the statement issued Monday.
The official figure of the country's economic growth in the first quarter of 2008 will be announced by the Central Statistics Agency on May 15.
Last year, the country's economy grew by 6.3 percent, mainly driven by private consumption, which government data shows contributed about 60 percent to the economy, while investment and exports each accounted for about 20 percent.
In this year, investment and consumption grew by 8.3 percent and 4.6 percent from January to March, respectively, lower than 12.1 and 5.1 percent recorded in the fourth quarter of 2007, BI predicts.
Miranda said rising inflationary pressures and sinking consumer confidence dampened growth in private consumption.
In the first quarter this year, year-on-year inflation reached 8.17 percent, an increase from 6.59 percent in 2007's final quarter, while inflation soared on rises in oil and commodity prices.
Oil prices soared above US$110 per barrel in March, and hovered above $116 per barrel on Monday, after reaching an all-time high of $119.93 per barrel last week. Some commodity prices, including soybeans and rice, have doubled in the first quarter this year.
On exports, BI said demand from Indonesia's importers declined in the first quarter this year due to the global economic slowdown, which has seen a reduction in international trade.
BI predicts exports grew 7.1 percent, slightly lower than the 7.3 percent increase between October and December last year.
It also forecast the process industry and the trade, hotel and restaurant sector would contract this year due to weakening private consumption. On the other hand, the agriculture sector was predicted to rise on the back of increases in commodity prices.
The transportation and telecommunications sector, electricity, gas and water sector and the property sectors were also estimated to achieve moderate growth.