By I Made Sentana
JAKARTA, Indonesia--Indonesia's economic growth slowed slightly in the third quarter, with tighter government purse strings constraining growth, though the pace of expansion remained above the 5% mark.
Southeast Asian's largest economy grew 5.02% during the July-September period from a year earlier, slowing from 5.18% in the second quarter, the official statistics agency said Monday. Sequentially, the economy grew 3.20% over the second quarter, compared with 4.02% growth previously, it said.
The median forecast of 11 economists polled by The Wall Street Journal was for 5.06% year-over-year growth, and 3.25% quarter-over-quarter expansion.
"The growth is quite good, but must be bolsteredfurther," the agency's chairman Suharyanto said. He partly blamed the slowing growth on the slowdown in several of Indonesia's export markets, such as China and Singapore.
Jakarta has reined in spending to avoid a widening of the budget deficit amid a falloff in tax revenues. The more cautious government stance on fiscal stimulus may add to pressure on Indonesia's central bank to continue supporting the economy with further rate cuts.
Household consumption remained the main growth driver, rising 5.01% year-over-year in the third quarter, compared with 5.04% in the second quarter. The government's spending contracted by 2.97%, after growing 6.28% in the second quarter, and investment growth slowed to 4.06% from 5.06% in the April-June period. Exports contracted 6.00%, compared with 2.73% contraction in the second quarter, while imports fell 3.87% compared with 3.01% in the prior quarter.
Consumer spending has gotten a boost this year asBank Indonesia lowered its benchmark interest rate and relaxed regulations on commercial banks' lending. Inflation has also been contained within the central bank's target, while the rupiah has been largely stable.
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(END) Dow Jones Newswires
November 07, 2016 00:16 ET (05:16 GMT)
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