Bloomberg -Indonesia’s economy grew at the slowest pace in more than two years last quarter as an export slump countered gains in domestic consumption, increasing pressure on policy makers to add stimulus to bolster growth.
Gross domestic product increased 6.11 percent in the three months through December from a year earlier, the Central Bureau of Statistics said in Jakarta today, compared with a previously reported 6.17 percent for the third quarter. The median of 20 economists surveyed by Bloomberg News was 6.2 percent. The economy grew 6.2 percent in 2012.
Slowing growth may compound challenges in an economy that is already contending with a weakening rupiah, declining exports and a widening current account deficit. Domestic consumption may slow as President Susilo Bambang Yudhoyono faces growing pressure to raise fuel prices and curb oil imports as currency risks persist and the window to act narrows ahead of elections due in 2014.
“Net exports have been a drag on growth,” Eugene Leow, a Singapore-based economist at DBS Group Holdings Ltd., said before the report. While investment and consumption growth remained stable, “the trade balance actually dipped into negative territory for the most part of 2012, placing stress on the external accounts.”
One-month non-deliverable forwards for the rupiah pared gains after the data release, gaining 0.1 percent to 9,688 per dollar as of 11:18 a.m. in Jakarta, after advancing as much as 0.3 percent earlier, data compiled by Bloomberg show. The contracts are settled in U.S. dollars.
Fuel Subsidies
Vice President Boediono last month forecast a fall in exports this year amid an uneven global recovery. Exports dropped 6.6 percent in 2012, contributing to a trade deficit of $1.63 billion last year.
Bank Indonesia will probably keep interest rates unchanged at a record-low 5.75 percent when policy makers meet Feb. 12, according to all 13 economists surveyed by Bloomberg News. The central bank last lowered rates in February 2012 and has avoided adding to the reduction to bolster a currency that was among the worst performers in Asia last year.
The rupiah weakened as the nation’s current account remained in deficit. Fuel subsidies that keep charges below international market rates have bolstered demand for energy imports in the world’s fourth most-populous nation, contributing to the widening current-account gap.
The economy may grow 6.3 percent to 6.8 percent in 2013, central bank Governor Darmin Nasution said Jan. 10.
