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JAKARTA (REUTERS) – Indonesia's economic growth slowed in the third quarter. It lost momentum after the turnaround of the previous quarter and reflects a tightening of conditions for the Southeast Asian economy, facing difficulties exiting its financial markets.
Gross domestic product (GDP) increased by 5.17% between July and September compared to the previous year, the statistics bureau announced Monday, November 5, against 5.15% in a poll conducted by Reuters and at 5.27% in the second quarter. hundred. The quarters from April to June were the fastest since the end of 2013.
The contribution of exports to the third quarter GDP was swept away by imports, according to the breakdowns provided by the bureau. Authorities expected a slowdown due to a decline in the net contribution of exports to GDP.
Growth in household consumption, which accounts for more than half of Indonesia's GDP, also weakened in the third quarter.
Andry Asmoro, an economist at Bank Mandiri, said the third-quarter growth figures would not affect the central bank's monetary guidance.
"The global challenge is still huge and prioritizing stability rather than growth remains topical in today's environment," he said.
The Indonesian central bank has raised interest rates five times since mid-May to slow down capital outflows and detain investors who had dumped emerging market assets.
While a trade war between the United States and China is expected to hurt economic growth in the region, most analysts say that Indonesia, which is less integrated into the supply chain most of the world's production, will not be among the most affected.
However, the trade war could put pressure on the Indonesian economy through its financial markets, exits from its stock and bond markets bringing the rupee to its lowest level in 20 years.
Bank of Indonesia (BI) officials, before the release of the data, said there is no indication that its rate hikes have affected the third quarter's growth rate, but analysts believe that Higher borrowing costs could slow down consumption in the medium term.
The government has also delayed infrastructure projects and increased tariffs on a wide range of consumer goods, reinforcing measures that could further weaken growth.
The government's official target for growth this year is 5.4%, but Finance Minister Sri Mulyani Indrawati said last month that the parliament would grow more than 5.14% in 2018.
The government is forecasting growth of 5.3% for next year.
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