Indonesia economy rises 6.5% in Q3, aided by spending

2011-11-07 17:54:12

Indonesia's economy grew 6.5 percent in the third quarter from a year earlier, buoyed by domestic consumption and private investment, the Central Statistics Agency said Monday.

That marked a slight slowdown from second-quarter growth, which the agency revised up Monday from 6.49 percent to 6.52 percent.

"Growth in Indonesia has slowed in line with the global economic slowdown, so exports have declined. But domestic consumption growth is still high, so we've been able to maintain relatively good growth," said the agency's statistical analysis deputy Slamet Sutomo.

"An increase in private investment has pushed the domestic economy and has helped improve infrastructure."

Indonesia's economy is Southeast Asia's biggest and among the fastest-growing in the world, with rich reserves of natural resources and a thriving domestic market of 240 million people.

"Indonesia's economy experienced year-on-year growth of 6.5 percent in the third quarter because of strong growth in several key industries," Sutomo said.

Agriculture, forestry and fisheries helped expansion with five percent growth year-on-year. The hotels and restaurants sector grew by 10.1 percent, Sutomo said.

Transport and communications rose by 9.5 percent, while the service industry grew 7.8 percent.

The figures are yet to be seasonally adjusted.

The third quarter included school holidays and the end of the Ramadan fasting month, when domestic consumption usually soars in the world's most populous Muslim country.

Indonesia has managed to post consistent economic growth each quarter, expanding 3.5 percent from the April-June quarter, and up 2.9 percent that quarter from the previous three months.

The country's central bank predicts 6.6 percent annual growth.

Indonesia's economic growth softened in 2009 amid the global economic downturn, but it still increased output 4.5 percent on the back of domestic demand and a relatively healthy banking system.