Indonesia's economic growth moderated slightly in the first quarter of 2012, as the lingering Eurozone debt crisis and the slowdown in Asian economies weighed on the demand for the country's exports.
Gross domestic product expanded 6.3 percent year-on-year, slower than the 6.5 percent growth in the fourth quarter of 2011, Statistics Indonesia said Monday. The outcome was in line with economists' expectations.
On a quarterly basis, the GDP rose 1.4 percent following a 1.3 percent contraction in the preceding three-month period. Expectations were for 1.47 percent growth.
Exports grew 7.8 percent from a year earlier, while imports rose 8.2 percent. On a quarterly basis, exports fell 7.2 percent and imports dropped 6.2 percent.
In December, the country regained its 'investment grade' rating after 14 years. Fitch Ratings upgraded its long-term foreign and local-currency issuer default ratings to BBB- from BB+, with a 'stable' outlook.
Earlier this year, Moody's also lifted Indonesia's ratings to investment grade, citing gains in investment spending, improved prospects for infrastructure development as well as a well-managed financial system.
The government is looking to boost consumption further this year and raise infrastructure spending to aid economic growth. Meanwhile, the rating upgrade is expected to contribute to the investment boom.
Investment grew 9.9 percent from a year earlier in the first quarter. Household expenditure increased 4.9 percent year-on-year, according to the statistical office.
Bank Indonesia kept the key interest rate unchanged for a second consecutive month in April after a quarter-point reduction in February.
The plus-6 percent growth in the first quarter likely reduced the pressure on the bank to ease policy in the near term. The central bank forecasts the economy to grow 6.3-6.7 percent this year and 6.4-6.8 percent in 2013.
In a report published last month, the World Bank said Indonesia's economic fundamentals remain solid. The lender projects 6.1 percent growth for the economy this year, which is then expected to pick up to 6.4 percent in 2013.
by RTT Staff Writer
For comments and feedback: email@example.com