May 15 (Bloomberg) -- Indonesia\u2019s economy grew at the fastest pace in Southeast Asia last quarter as local spending accelerated at its fastest pace since at least 2000, helping the nation fend off the global recession.<\/p>\n
Gross domestic product expanded 4.4 percent in the three months to March 31 from a year earlier, compared with a 5.2 percent gain in the previous quarter, the statistics bureau said in Jakarta today. That was more than the median forecast of 4.3 percent in a Bloomberg News survey of 19 economists.<\/p>\n
Indonesia has been less affected than its Asian neighbors by the worst global slump since World War II as it isn\u2019t as reliant on exports. Singapore\u2019s economy shrank the most since at least 1975 in the first quarter and Thailand\u2019s Finance Minister Korn Chatikavanij expects a \u201cpretty bloody\u201d GDP contraction of as much as 6 percent in the same period.<\/p>\n
\u201cDomestic demand appears to be holding up,\u201d said Purbaya Yudhi Sadewa, chief economist at Danareksa Research Institute in Jakarta. \u201cThe fact that growth exceeded consensus signals we have reached the bottom and we can expect growth to pick up.\u201d<\/p>\n
Bank Indonesia predicts the economy will expand at the higher end of its 3 percent to 4 percent range this year, central bank Deputy Governor Hartadi Sarwono said today. Goldman Sachs Group Inc. yesterday raised its 2009 forecast to 3.5 percent from a previous estimate of 2.5 percent.<\/p>\n
Consumer Confidence<\/p>\n
Consumer confidence in Southeast Asia\u2019s largest economy soared to a four-year high in April, according to a central bank survey of more than 4,300 households in 16 cities. Respondents expected \u201crelatively favorable\u201d incomes over the next six months and were more willing to spend their money on durable goods, the Bank Indonesia survey showed.<\/p>\n
Spending by consumers jumped 5.8 percent in the first quarter from a year earlier, from 4.8 percent in the fourth quarter, according to today\u2019s report. Investment increased 3.5 percent. Exports plunged 19.1 percent in the quarter.<\/p>\n
Rising confidence in Indonesia\u2019s growth prospects, and investor speculation that demand for emerging-market assets will increase as the global economy recovers from a recession, has buoyed the nation\u2019s stocks and the currency.<\/p>\n
The benchmark stock index has climbed 28 percent since the start of the year and the rupiah was this week trading near the highest level in six months after Finance Minister Sri Mulyani Indrawati said May 12 that Indonesia\u2019s economy may expand 5 percent to 6 percent next year. The Jakarta Composite index fell 1.9 percent today.<\/p>\n
\u2018Recovering Swiftly\u2019<\/p>\n
\u201cThere appears to be pockets of resilience in the economy and consumer confidence is recovering swiftly,\u201d said Anton Gunawan, the Jakarta-based chief economist at PT Bank Danamon Indonesia. \u201cThe deceleration in economic growth is unlikely to be very severe.\u201d<\/p>\n
Other Southeast Asian economies are not faring as well. Vietnamese GDP expanded 3.1 percent in the three months to March 31 from a year earlier, the weakest pace since quarterly statistics were first available in 1999. The Philippine economy likely grew between 2.1 percent and 3.1 percent in the first quarter, Economic Planning Secretary Ralph Recto said April 20.<\/p>\n
Hong Kong\u2019s economy contracted 7.8 percent in the first quarter from a year earlier, following a decline of 2.5 percent in the previous three months, the government said today.<\/p>\n
Indonesia\u2019s $433 billion economy may also benefit from spending on this year\u2019s parliamentary and presidential elections, said economists including Juniman from PT Bank Internasional Indonesia in Jakarta.<\/p>\n
President Susilo Bambang Yudhoyono\u2019s Democrat Party won 148 seats in the 560-member House of Representatives in last month\u2019s elections. That\u2019s enough under Indonesian law to allow the party to pick a candidate to run in July\u2019s presidential poll.<\/p>\n
Interest Rates<\/p>\n
Lower borrowing costs are also encouraging consumers to spend. Bank Indonesia has cut its benchmark interest rate for six straight months, with Governor Boediono last lowering the key rate by a quarter-point to 7.25 percent on May 5, the lowest since the measure was introduced in July 2005.<\/p>\n
Motorcycle sales in Indonesia rose in March for a second straight month, with 435,881 units sold, according to a report from the Indonesian Automotive Industries Association issued by PT Astra International.<\/p>\n
Indonesian GDP, which the government expects to expand between 4 percent and 4.5 percent this year, grew 1.6 percent in the first quarter from the previous three months.<\/p>\n
\u201cThe resilience of domestic demand will remain the bedrock to Indonesia\u2019s growth recovery,\u201d said Enoch Fung, an economist at Goldman Sachs Group Inc. in Hong Kong. \u201cIndonesia is one of the least external-demand-dependent economies in the region.\u201d<\/p>\n
To contact the reporters on this story: Aloysius Unditu in Jakarta at aunditu@bloomberg.net; Berni Moestafa in Jakarta at bmoestafa@bloomberg.net<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indonesia-gdp-grows-at-fastest-pace-in-southeast-asia-1242431729", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }