Indonesia economy slows as commodity price slump bites

Agence France-Presse

Posted at Nov 07 2019 07:27 AM

General view of a business district during sunset in Jakarta, Indonesia, November 5, 2019. Willy Kurniawan, Reuters

JAKARTA — Indonesia posted another quarter of slowing growth Tuesday, its weakest pace in 2 years, as Southeast Asia's biggest economy feels the sting of slumping commodity prices.

The economy expanded 5.02 percent in the July-September period, slipping from 5.17 percent in the same period last year, and the weakest since 2017.

Indonesia is grappling with slumping prices for key commodities such as coal and palm oil, as the global economy falters on the back of an intensifying US-China trade war.

"The global economy is shadowed by uncertainty," said statistics agency head Suhariyanto, who goes by one name.

"During the third quarter, prices for our commodities... have dropped in the international market," he added.

Last month Indonesia's central bank cut interest rates for the fourth month in a row in a bid to pump up the economy.

The sagging growth is a challenge for Indonesian President Joko Widodo, who was re-elected this year largely on his infrastructure-driven bid to energize the economy.

"The prospects for a sustained improvement in economic performance depend on whether Joko Widodo can forge ahead with his reform agenda, including pushing through unpopular labor market reforms and big increases in infrastructure spending," research house Capital Economics said in a report.

"We remain unconvinced," it added.

 
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