Indonesia Q2 GDP growth edges down to weakest in two years

Jakarta: Indonesia’s economic growth rate remained around 5 per cent in the second quarter and was the weakest in two years, highlighting the difficulties it faces accelerating GDP expansion amid global uncertainties.

Southeast Asia’s largest economy grew 5.05 per cent in April-June, a touch cooler than January-March’s 5.07 per cent, the statistics bureau said on Monday.

The pace matched the forecast in a Reuters poll.

During the quarter, President Joko Widodo was re-elected to a second five-year term in a hotly-contested election.

Widodo has been trying to lift growth well above 5 per cent, the pace Jakarta has seen since the end of the commodities boom, by investing in infrastructure and giving tax breaks to lift manufacturing.

However, with the country still reliant on natural resources, low commodity prices, bouts of global market turbulence and tepid investment levels have undercut efforts to lift growth.

Fakhrul Fulvian, an economist with Trimegah Sekuritas in Jakarta, called the second quarter pace “positive”, arguing that other emerging markets also have slowdowns.