Indonesia logged the weakest growth since the third quarter of 2010 as household spending that is one of the biggest contributor to the economic output, slowed in the first quarter, dragging both imports and investment.
Southeast Asia's largest economy grew 6.02 percent on a yearly basis in the first quarter, data published by Statistics Indonesia revealed Monday. The growth rate was below the consensus forecast of 6.12 percent and the 6.11 percent growth registered in the previous quarter.
Gross domestic product rose 1.41 percent from a quarter ago, which was also weaker than the 1.52 percent expansion forecast by economists.
Growth in household spending decelerated to 5.17 percent from 5.36 percent. Government spending, at the same time, gained only 0.42 percent. Investment grew at a slower pace of 5.9 percent.
Exports of goods and services rose 3.39 percent. On the other hand, imports eased 0.44 percent, partly reflecting weak domestic demand.
Standard & Poor's last week cut the outlook on Indonesia's sovereign ratings to 'stable' from 'positive', citing stalling reform momentum and a weaker external profile.
The latest GDP figure raises concern about the ability of the government to attain its growth target of 6.8 percent in 2013.
Last month, Bank Indonesia downgraded its growth estimate for this year to 6.2 percent-6.6 percent from the previously estimated range of 6.3-6.8 percent.
Nonetheless, the recent survey by Markit Economics revealed that activity in the manufacturing sector expanded for the third successive month on new business and production.
Input prices paid by goods producers increased notably in April, but at the slowest pace in four months, the Purchasing Managers' survey showed. Consequently, output prices rose at a faster rate, extending the trend seen since the series began.
In April, the central bank kept its policy interest rate unchanged at a record low 5.75 percent for the fourteenth time in a row as it expects inflation to cool in months ahead.
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