JAKARTA: Indonesia’s efforts to reboot its economy were dealt a blow Monday as official data showed growth ticking up in 2016 but undershooting expectations for the final quarter.
President Joko Widodo came to power in 2014 on a pledge to boost economic expansion to seven percent but his government has struggled to lift growth rates in Southeast Asia’s largest economy, which is rich in resources but has suffered from a slump in commodity prices.
After several years of subdued economic output, government figures showed a glimmer of acceleration for 2016, with growth of 5.02 percent, compared to 4.88 percent a year earlier— the smallest expansion since 2009.
But a weaker-than-expected quarterly performance of 4.94 percent in the period October to December overshadowed the annual data. The growth in the fourth quarter was dragged down by a dip in government spending.
The statistics agency said that the top contributors for growth last year were manufacturing and agriculture.
Authorities unleashed a series of economic stimulus last year to reinvigorate growth, while the central bank cut the key interest rate six times.
Now analysts say there is little room for manoeuvre.
“Looser fiscal and monetary policies have helped to support growth over the past year, but further easing is unlikely over the next year,” said Gareth Leather of London-based Capital Economics.
Economists said while growth won’t slow further, it won’t accelerate further either, with Capital Economics maintaining its estimation for Indonesia at a flat rate of five percent for this year and next.