JAKARTA: Indonesian growth accelerated slightly in the first quarter on improving exports, official data showed Friday, but the outlook for the recovery in Southeast Asia’s top economy is subdued.
President Joko Widodo came to power in 2014 on a pledge to boost growth to seven percent but his government has struggled to lift rates in the country, which is rich in resources but has suffered from a slump in commodity prices.
The economy grew 5.01 percent year-on year in January-March, slightly up from the previous quarter’s 4.94 percent, according to the statistics agency.
Exports surged 20.8 percent on-year, and grew 1.33 percent from the previous three months, said statistics agency chief Suhariyanto, who goes by one name.
The increase came on the back of a jump in the prices of some food exports, such as tea and shrimp, according to the statistics agency, while improving conditions in key destinations such as China and the United States also helped.
However, consultancy Capital Economics said falling prices of coal and palm oil—key exports for the nation—were weighing on growth.
“Looking ahead, with commodity prices likely to stay relatively depressed and credit growth set to remain weak, we expect growth to remain stuck at around five percent over the next couple of years,” Capital Economics’ Gareth Leather said.
Growth in Indonesia has been stuck at around five percent for the past three years, below the 5.8 percent average recorded over the past decade, according to the London-based consultancy.
Authorities have been scrambling to boost growth, unleashing a series of economic stimulus measures last year, while the central bank cut the key interest rate six times.
Full-year growth ticked up to 5.02 percent in 2016 but undershot expectations in the final quarter.