JAKARTA (Bloomberg): Indonesia’s economy grew slower than expected in the third quarter, as exports declined and higher borrowing costs weighed on consumers.
Official data on Monday (Nov 6) showed gross domestic product expanded 4.94% from a year ago, less than the 5% median estimate from analysts surveyed by Bloomberg. The economy grew 1.6% from the previous three months, in line with the 1.67% survey estimate.
The softer year-on-year print - the first reading below 5% since the three months ended September 2021 - underlines the headwinds to recovery for South-east Asia’s largest economy. Exports have declined for six of the nine months for which data is available so far this year, while higher interest rates have weighed on consumers.
Higher borrowing costs risk worsening the economy’s outlook by crimping consumption. Indonesia’s central bank unexpectedly raised its benchmark rate to a four-year high of 6% last month to support a weakening rupiah.
The government, for its part, is ramping up spending to aid growth and also shield the poor from higher costs of living. Finance Minister Sri Mulyani Indrawati (pic) said policy perks such as additional social aid and tax incentives should put Indonesia’s economy on track to grow 5.1% in 2023.
