Indonesia’s economy decelerated in the third quarter as harsh lockdowns to contain a record spike in COVID-19 cases outweighed higher commodity prices and trade.
GDP in the quarter rose 3.51 percent from a year earlier, Indonesia’s statistics bureau, Badan Pusat Statistik (BPS), announced yesterday, down from 7.07 percent growth in the second quarter, as the virus wave peaked in July and August.
That below the median estimate of 3.88 percent in a Bloomberg survey of economists and the government’s projection of 4.5 percent.
Photo: Bloomberg
“Third-quarter growth slipped below market consensus, as mobility curbs implemented during the period likely weighed on consumption, offsetting robust exports” said Nicholas Mapa, a senior economist at ING Groep NV in Manila. “We expect better fourth-quarter GDP results as movement restrictions have been relaxed further.”
Indonesian stocks extended declines after the report, with the Jakarta Composite Index falling as much as 0.2 percent. The rupiah was down 0.4 percent to 14,388 rupiah to the dollar as of 9:41am in Jakarta.
Authorities had ordered people to stay home and shut most businesses in the third quarter as the highly infectious Delta variant of SARS-CoV-2 sent caseloads skyrocketing, inundating hospitals and spurring a race to vaccinate 1 million people per day.
GDP growth for the July-to-September period was 1.55 percent compared with the previous quarter on a non-seasonally adjusted basis, lower than the 1.9 percent seen by economists.
Public activity and domestic tourism during the period declined both from a year earlier and the preceding quarter, BPS head Margo Yuwono told a news conference.
Meanwhile, the global economic recovery improved, including in trade partner countries, while commodity prices rose, he said.
While consumption and foreign direct investment stalled due to the outbreak, soaring prices of commodities have been a lifeline for Indonesia, a top exporter of coal and palm oil.
Outbound shipments hit an all-time high in August, while the trade surplus surged to more than US$4 billion in the third quarter.
Exports in the third quarter rose 51 percent from a year ago to US$61.4 billion, the statistics office said, while imports rose 47 percent to US$48.2 billion.
Southeast Asia’s largest economy expects the recovery to regain pace this quarter as the outbreak is brought under control and movement curbs are relaxed.
Improved manufacturing activity and retail sales should add to export momentum and drive full-year GDP, which the Indonesian Ministry of Finance last month said it expects to grow at 4 percent. The government had earlier set a target range of 3.7 to 4.5 percent for the year.
“Resurgent consumption alongside a strong export rebound should figure in a strong finish for the year,” Mapa said.
Bank Indonesia said it would keep its policy interest rate at a record low until the economy is on steadier footing, likely deferring any increase until late next year.
The central bank also could maintain looser policy on down payments for home and auto purchases until 2023 to spur lending.
In Italy’s storied gold-making hubs, jewelers are reworking their designs to trim gold content as they race to blunt the effect of record prices and appeal to shoppers watching their budgets. Gold prices hit a record high on Thursday, surging near US$5,600 an ounce, more than double a year ago as geopolitical concerns and jitters over trade pushed investors toward the safe-haven asset. The rally is putting undue pressure on small artisans as they face mounting demands from customers, including international brands, to produce cheaper items, from signature pieces to wedding rings, according to interviews with four independent jewelers in Italy’s main
Macronix International Co (旺宏), the world’s biggest NOR flash memory supplier, yesterday said it would spend NT$22 billion (US$699.1 million) on capacity expansion this year to increase its production of mid-to-low-density memory chips as the world’s major memorychip suppliers are phasing out the market. The company said its planned capital expenditures are about 11 times higher than the NT$1.8 billion it spent on new facilities and equipment last year. A majority of this year’s outlay would be allocated to step up capacity of multi-level cell (MLC) NAND flash memory chips, which are used in embedded multimedia cards (eMMC), a managed
Japanese Prime Minister Sanae Takaichi has talked up the benefits of a weaker yen in a campaign speech, adopting a tone at odds with her finance ministry, which has refused to rule out any options to counter excessive foreign exchange volatility. Takaichi later softened her stance, saying she did not have a preference for the yen’s direction. “People say the weak yen is bad right now, but for export industries, it’s a major opportunity,” Takaichi said on Saturday at a rally for Liberal Democratic Party candidate Daishiro Yamagiwa in Kanagawa Prefecture ahead of a snap election on Sunday. “Whether it’s selling food or
In the wake of strong global demand for AI applications, Taiwan’s export-oriented economy accelerated with the composite index of economic indicators flashing the first “red” light in December for one year, indicating the economy is in booming mode, the National Development Council (NDC) said yesterday. Moreover, the index of leading indicators, which gauges the potential state of the economy over the next six months, also moved higher in December amid growing optimism over the outlook, the NDC said. In December, the index of economic indicators rose one point from a month earlier to 38, at the lower end of the “red” light.
RSS