Indonesia’s GDP growth troughs in second quarter

JAKARTA - Indonesia's GDP has come in slightly below expectations, with private consumption continuing to buoy growth while there was a moderation in investment, as expected. On the trade side, imports fell by more than exports resulting in a positive contribution from net-exports despite no ore shipments over the quarter.

In a research note, ANZ Bank says it expects Q2 to be the trough for Indonesia in terms of growth, but the pending cyclical uptick in the second half of the year will be fairly muted, it adds.

“We expect private consumption to remain the bedrock of growth, with investment expenditure picking up now that election uncertainties are out of the way. Tighter monetary policy and supply side adjustments will cap any strong growth rebound.

“There are downside risks to our full year forecast of 5.4%. However, it is in line with an expected pickup in growth through H2. Into 2015, we expect momentum to continue with growth accelerating to 5.8%.”  www.live.anz.com (ATI).