JAKARTA: Indonesia’s economy grew at its slowest pace for six years in 2015, data showed on Friday, as it was hit by plunging commodity prices and falling exports to key markets including China.
Southeast Asia’s largest economy grew 4.79 percent last year, the first time it has fallen below 5 percent since 2009 at the height of the global financial crisis, and well short of the government’s 7 percent target. It grew 5.02 percent in 2014.
However, a slight uptick in October-December—with 5.04 percent year-on-year growth—beat expectations and raised hopes the country can kick on in 2016 as President Joko Widodo rolls out economy-boosting measures.
“There is an improvement in the fourth quarter, so we hope the growth will increase in the future, especially this year,” Statistics Agency chief, Suryamin, who goes by one name, said.
With the global economy suffering a painful slowdown—most startlingly in China—demand for the country’s key exports coal and palm oil slackened, hammering revenues.
The crisis led Widodo—known as Jokowi—to introduce a string of measures to lift the economy including a drive to attract much-needed foreign investment, ramping up infrastructure projects and introducing bureaucratic reforms.
And last month the central bank slashed interest rates by 25 basis points for the first time since February 2015, with signals that further reductions are likely in the future. The finance ministry has targeted 5.3-percent growth this year.
Analysts welcomed the end-of-year pick-up.
“Prospects for Indonesia’s economy appear to have improved over the past few months,” Capital Economics said in a statement.
But it added: “While recent economic reforms should provide a boost to confidence, they will need time to take effect.”
The group forecast 5.0 percent for this year and next.