Indonesia: Economic growth slows slightly in the third quarter
November 5, 2012
In the third quarter, GDP grew 6.2% over the same quarter last year, which was down from the 6.4% increase observed in the second quarter but slightly above market expectations of a 6.1% expansion. The deceleration in Q3 mainly reflected a slowdown in domestic demand amid a sharp fall in public spending. Private consumption growth remained robust and accelerated from a 5.0% expansion in the second quarter to a 5.7% rise in the third, representing the fastest rate of growth seen in more than three years. In addition, fixed investment rose 10.0% in the third quarter (Q2: +12.3% year-on-year). Government consumption, on the other hand, fell 3.3% in Q3, contrasting the 7.0% expansion seen in the second quarter. On the external side, exports contracted 2.8% in the third quarter, contrasting the 1.9% rise observed in the second quarter. Simultaneously, imports swung from a 10.9% expansion in the second quarter to a 0.6% decline in the third. As a result, the external sector's net contribution to overall growth remained negative but improved from minus 4.6 percentage points in the second quarter to minus 0.8 percentage points in the third. The Central Bank expects the economy to grow between 6.1% and 6.5% this year and between 6.3% and 6.7% in 2013.