Indonesia’s economy grew at its slowest pace for five years in the third quarter, official data showed yesterday, underlining the challenge for Indonesian President Joko Widodo to get Southeast Asia’s top economy back on track.
The G20 economy expanded 5.01 percent year-on-year in the three months to the end of September, down from 5.12 percent in the previous quarter, with demand for the country’s key commodities exports continuing to weaken. It was the slowest pace of expansion since the third quarter of 2009 and below economists’ forecasts of 5.1 percent.
“The poor performance highlights the scale of the challenge facing the country’s new president,” Capital Economics Asia economist Gareth Leather said. “Joko Widodo offers Indonesia the prospect of a fresh start after years of policy drift, but he will have his work cut out.”
Widodo, inaugurated last month, has pledged to lift growth to 7 percent over the next two years by overhauling the country’s creaking infrastructure and cutting red tape to attract more foreign investors.
One of his most immediate challenges will be cutting huge government fuel subsidies, blamed for a widening current account deficit.
However, Widodo faces a tough task, as he takes power at a time when growth has slowed from recent highs of more than 6 percent due to weak demand for its commodities exports, in particular from powerhouse China.
Indonesia might also face problems from the US Federal Reserve’s decision last week to end its huge stimulus program, analysts said.
The gradual winding down of the vast bond-buying scheme over the past year has already dried up crucial flows of foreign capital to Indonesia and other emerging markets. Yesterday’s data showed that exports were 0.7 percent lower in the third quarter from the same period a year ago, continuing a recent slide, with the Indonesian government statistics agency blaming weak demand for commodity exports, such as coal and palm oil.
The slowdown in exports has also been driven in part by a controversial ban on the shipment of some mineral ores, which has hit major miners. However, household consumption, which has been a major driver of the economy due to the growth of the middle class, expanded at a healthy 5.44 percent year-on-year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
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Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day