Indonesia’s gross domestic product (GDP) growth in the second quarter of 2014 slowed to 5.12 percent (year-on-year, yoy), thus decelerating compared to the nation’s GDP growth in the previous quarter (5.22 percent yoy). The Q2-2014 GDP growth result was lower than the figure that was projected by the central bank of Indonesia (Bank Indonesia). The institution previously stated that it expected Q2-014 economic growth to reach 5.3 percent (yoy). Below are some comment of Bank Indonesia on economic growth in the second quarter.
Indonesia's Quarterly GDP Growth 2009–2014 (annual % change):
|Year|| Quarter I
||Quarter II||Quarter III||Quarter IV|
Source: Statistics Indonesia (BPS)
Gross Domestic Product of Indonesia 2006-2013:
(in billion USD)
(annual percent change)
|GDP per Capita
Sources: World Bank, International Monetary Fund (IMF) and Statistics Indonesia (BPS)
The slowing pace of economic growth in Indonesia was mainly due to the contraction of the country’s export growth, particularly the natural resources based commodities. Several mining export products were still stalled resulted from the recently implemented ban on exports of raw minerals (part of the Minerba Act), while exports of coal and crude palm oil (CPO) weakened amid sluggish demand.
Furthermore, economic growth in Southeast Asia’s largest economy contracted due to declining government spending as well as non-construction investment activities. The delay in distribution of social assistance funds (Bansos) led to a decline in spending of the government for the poorer communities. Meanwhile, the negative growth of non-construction investment was caused by continued contraction in overseas transportation equipment investment following the still weak performance of Indonesian mining exports.
Economic growth in the second quarter of 2014 was supported by strong household consumption, partly brought on by the legislative and presidential elections. For example, the food and beverage industry and also the paper industry experienced marked improvements. Construction investment also grew relatively well. Meanwhile, declining imports were the result of a moderation of domestic demand and thus helped to reduce external pressure amid the decline in exports.
Bank Indonesia believes that the deceleration of economic growth in Q2-2014 is in line with the measures that have been implemented by the central bank and Indonesian government to combat inflation as well as the country’s wide current account deficit.
Well - I think the Indonesian economy does better with Joko Widodo as President..!