Indonesia's growth slowed slightly in the third quarter, government data showed Monday, as Southeast Asia's largest economy grapples with an emerging currency selloff and a downturn in consumer spending. The commodities-driven economy expanded 5.17 percent between July and September, slower than in the second quarter, when Ramadan gave some "momentum for consumption" in the world's biggest Muslim majority country, the head of the statistics bureau told a press conference.
Household spending - which accounts for more than half of Indonesian GDP - was also slower compared to the previous quarter, although slightly higher than in the same three months in 2017. "Overall, we think economic growth in Indonesia will remain stuck at around 5 percent over the next couple of years," Alex Holmes, an economist at consultancy Capital Economics, said in a report.
President Joko Widodo - who faces national elections in April - came to power in 2014 on a pledge to boost annual growth to seven percent but his government has struggled to rev up the economy. Holmes saw "little prospect of a sustained upturn" and expected the export sector to be a key drag on growth over the next year.
Indonesia has been grappling with a slumping rupiah from an emerging market selloff with the unit at levels last seen during the late-nineties Asian financial crisis. The country's central bank has raised its key rate five times since May after the government said it was taking other measures to protect the weak currency.
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