Indonesia’s economy maintains sustained growth momentum in the first quarter
Band Fransiska Nangoy and Stefanno Sulaiman
JAKARTA, May 9 (Reuters) – A historic rise in commodity prices and an easing of COVID-19 restrictions helped Indonesia’s economy grow for a fourth consecutive quarter between January and March, official data showed on Monday.
Southeast Asia’s largest economy grew 5.01% in January-March compared to the same period last year, compared with growth of 5.02% in October-December. A median forecast from 19 analysts polled by Reuters called for growth of 5.00% in the first quarter.
Growth in the January-March period was supported by the recovery in consumption, investment and exports. Soaring prices for global commodities such as coal, palm oil and nickel have also contributed to record trade surpluses for Indonesia, a major supplier of these resources.
COVID-19 restrictions imposed earlier in the year, which have now been lifted, have led to a strong recovery in Indonesia’s economic activities, Margo Yuwono, head of the Indonesian Bureau of Statistics, told a conference of hurry.
“Household consumption has improved, even for tertiary expenditure such as travel,” he added.
But President Joko Widodo has warned of inflation risks stemming from rising global fuel and food prices and supply chain disruptions worsened by war in Ukraine.
Analysts also cited geopolitical concerns as factors that could hamper growth.
“Several global risks that will affect the national economic recovery include geopolitical risks, China’s economic slowdown and rising global inflation which has led to global monetary policy tightening,” said Josua Pardede, economist at Bank Permata. .
Indonesia’s central bank last month lowered its economic growth outlook for the year to 4.5%-5.3% from 4.7%-5.5% previously, citing slowing global growth and trade disruptions.
Bank Indonesia (BI), which has pledged to keep interest rates at historically low levels until it sees signs of pressure on underlying inflation, intends to review its plan to normalize monetary policy from May to June and to assess any risk to the inflation outlook if the government changes energy prices and subsidies.
He had previously said that interest rate levels would not be reviewed until the third quarter.
On an unadjusted quarterly basis, the economy contracted 0.96%, compared to growth of 1.06% in October-December and a forecast decline of 0.89%.
(Editing by Kanupriya Kapoor and Jacqueline Wong)
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