Growth slows in second quarter: BPS<\/p>\n
Zakki P. Hakim, The Jakarta Post\/Jakarta<\/p>\n
The country's economy grew at a slower rate in the second
\nquarter, compared to the first quarter of the year as consumer
\nspending weakened due to rising inflation.<\/p>\n
The Central Statistics Agency (BPS) said that the economic
\ngrowth in the April-June period of this year was 4.32 percent
\ncompared to the same period last year. The agency said that
\nyear-on-year growth in the first quarter was 5 percent. (The
\nagency on Monday revised the first quarter growth from the
\nearlier reported 4.66 percent.)<\/p>\n
Economists have previously predicted that the economy would
\ngrow at around 4.7 percent in the second quarter.<\/p>\n
The lower than expected growth rate means the government must
\nwork harder to achieve its full-year economic growth target of
\n4.8 percent particularly amid the current trend of surging oil
\nprices, which economists said would eventually affect economic
\ngrowth both at home and abroad.<\/p>\n
BPS did not provide an explanation on the slower growth rate,
\nbut rising inflationary pressures during the past three months
\ndue to weakening of the rupiah (the local unit has declined by
\nnearly 10 percent against the dollar) reduced consumer spending
\nas purchasing power weakened. Inflation hit a 15-month high of
\n7.2 percent in July, higher than the government's annual rate
\ntarget of 6.5 percent, due to soaring prices of food and other
\nbasic commodities.<\/p>\n
Domestic consumption has been the main engine of economic
\ngrowth during the past few years, accounting more than 68 percent
\nof gross domestic product (GDP).<\/p>\n
Growth in household spending slowed to 5.26 percent in the
\nsecond quarter from 5.71 percent in the first quarter. Government
\nspending in infrastructure, meanwhile, expanded by 6.08 percent,
\nbut less than half the 12.75 percent gain was in the previous
\nquarter.<\/p>\n
Indonesia, the largest economy in Southeast Asia, has been
\nlagging behind its neighbors in terms of the pace of economic
\nrecovery, mainly due to weak investment, a key factor for the
\ncountry to accelerate growth to more than 6 percent and help
\nresolve its chronic unemployment problem.<\/p>\n
BPS said that GDP grew by 0.86 percent in the second quarter
\nfrom the first quarter, while it expanded by 4.66 percent in the
\nfirst half of the year compared to the same period of last year.<\/p>",
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