Indonesian economy slows to 6.23% in 2012
JAKARTA - Indonesia said Tuesday that growth in Southeast Asia's biggest economy slowed to 6.23 percent in 2012 owing to global headwinds, but was supported by strong domestic consumption and investment.
The slip, from 6.5 percent expansion seen in 2011 year and below Jakarta's 6.3 percent forecast, came as the country also recorded its first trade deficit owing to a fall in demand for exports from key markets such as China and India.
Central Statistics Agency chief Suryamin, who goes by one name, said the weaker-than-expected data was "due to the ongoing global crisis and because of (Indonesia's) trade deficit".
However, the growth rate is "still the third strongest in Asia after China and the Philippines", Robert Prior-Wandesforde, director of Asian economics for Crédit Suisse in Singapore, told AFP.
And OCBC Bank economist Gundy Cahyadi said: "Overall, it is still a decent figure."
The country's resilience has been attributed to its driving domestic consumption, which accounts for about 60 percent of gross domestic product.
Purbaya Yudhi Sadewa of Jakarta-based Danareksa Research Institute, said: "I think we will still see investment flowing in this year because, compared to the countries in the region, Indonesia is still promising for investors."
Sadewa predicted growth of 6.5 percent this year.
The agency also said growth in the final three months of the year came in at just 6.11 percent year on year from 6.16 percent in the third quarter.
It had contracted 1.45 percent quarter on quarter, after growth of 3.18 percent in the previous three months.
Despite the weakness seen at the end of the year analysts said they were still hopeful for the next 12 months.
"The figures, despite lower than we thought, are not worrying because it is still tolerable," Bank Internasional Indonesia chief economist Juniman said.
Juniman, who goes by one name, also expects the economy to grow 6.5 percent this year.
The central bank forecasts that growth this year will reach between 6.3 and 6.7 percent.
Tuesday's figures come on the back of a string of results from around the region that have showed a slowdown from the previous year.
Even China's huge economy expanded at its slowest pace in 13 years, while India's central bank has tipped 5.5 percent growth this year, from 6.2 percent in the year to March 2012, and 9.3 percent previously.
The weakness in China and India -- big buyers of Indonesian coal and oil -- also had a knock-on effect for Jakarta, which saw exports slide 6.61 percent, leading to the country's first ever trade deficit.
Economists said the world's 16th-biggest economy could grow even faster in the coming years if it improves its infrastructure and regulatory climate to encourage more investment into the country.
"Up to now, the government has still not been able to acquire land for infrastructure, and they should fix this because infrastructure will accelerate economic growth," said Juniman.
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