Economy slows down in Q3, for third quarter in a row<\/p>\n
Urip Hudiono, The Jakarta Post, Jakarta<\/p>\n
Indonesia's economy has continued growing at a slower rate,
\nofficial figures from the Central Statistics Agency (BPS) show,
\nas high oil prices and rising interest rates dampened exports and
\ninvestments, while consumption also stalled under a rising
\ninflation.<\/p>\n
In its latest report on the country's economy in the third
\nquarter, BPS said Indonesia's gross domestic product (GDP) from
\nJuly to September only grew by 5.34 percent, compared to the same
\nperiod last year.<\/p>\n
The figure marks a continued economic deceleration for three
\nquarters in a row, after a revised 5.84 percent growth during
\nthis year's second quarter against 6.19 percent in the first.
\nIndonesia's economy had managed to expand by 6.65 percent during
\nlast year's final quarter, wrapping up the year at 5.13 percent.<\/p>\n
BPS deputy chief for statistical analysis, Slamet Sutomo, said
\non Monday that the economic slowdown in the third quarter was
\nprimarily due to soaring global oil prices, which had touched
\nUS$70 a barrel on Aug. 30. A hike in fuel prices for industries
\nin August, following a fuel price hike by an average of 29
\npercent in March, had also made it even tougher for the economy.<\/p>\n
The central bank, meanwhile, was forced to raise its key
\ninterest rates amid a global trend of rate hikes and to support
\nthe rupiah, which had slumped below Rp 10,000 to the U.S. dollar
\nas oil prices continued to rise.<\/p>\n
Bank Indonesia (BI) also increased its rates to contain
\ninflation, which has shot up to 8.81 percent after the March fuel
\nprice hike, and only eased down in May before rising again to
\n9.06 percent for the month of September.<\/p>\n
"The high oil prices and rising interest rates have
\nparticularly made production costs of businesses in the country
\nsurge, slowing down the economy," Slamet said. "Rising inflation
\nalso ate away at consumption."<\/p>\n
BI Governor Burhanuddin Abdullah said the central bank would
\ntry to avoid a significant interest rate hike again in the future
\nto avoid hurting economic growth.<\/p>\n
The conditions meant year-on-year growth of exports choked at
\n3.39 percent from 12.69 percent in the second quarter with
\nexports failing to gain on a weaker rupiah, while investment
\ngrowth also slowed to only 9.18 percent from 14.54 percent.<\/p>\n
Indonesia's main economic engine of consumption grew by 4.43
\npercent -- slightly higher than 3.46 percent in the second
\nquarter -- amid a new academic year and preparations for Ramadhan
\nand Idul Fitri, although it slowed down in anticipation of Oct. 1
\nfuel price hike.<\/p>\n
Growth during the third quarter was only rescued by government
\nspending, which grew by 16.15 percent on more realized projects
\nduring the period, so that the country's economy still managed to
\nexpand by 5.76 percent to Rp 2,012 trillion (US$201.2 billion)
\nfor this year's first nine months.<\/p>\n
By sector, BPS reported that many components of the economy
\nwere also experienced slower growth, with mining contracting by
\n2.32 percent from the same period last year.<\/p>\n
One of the few rays of lights was Indonesia's transportation
\nand communications sector, however, which managed to retain high
\ngrowth of 12.87 percent.<\/p>",
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