Indonesia economic growth eases in Q3 following low commodity prices, weak global demand

The economic growth of Indonesia slightly eased during the third quarter of this year, compared to a year ago period, following lower commodity prices amid an environment of weak global demand that hurt overseas trade as well as government spending during the period.

The gross domestic product (GDP) in South-east Asia’s biggest economy increased 5.02 percent in the third quarter from a year earlier, compared with a revised 5.19 percent in the second quarter, data released by the country’s statistics bureau showed Monday. The median estimate of 22 economists surveyed by Bloomberg was for growth of 5.08 percent.

Further, GDP rose 3.2 percent in the third quarter from the previous three months, compared with a median estimate of 3.25 percent in a Bloomberg survey. Government spending fell to 439.7 trillion rupiah in the third quarter compared with 484.8 trillion rupiah a year ago period.

Also, the bureau revised up the second quarter growth slightly to 5.19 percent, from 5.18 percent. While, the economy is far behind hitting the 7 percent growth target set up by President Widodo when he took office two years ago, he is seeking billions of dollars to help fund an ambitious infrastructure agenda that includes building roads, railways and sea-ports, Bloomberg reported.

The Indonesian equities and the rupiah did not reach much post the release of the data, as the growth is partially in line with forecasts. However, weakness in the domestic currency is linked to growth strength of the greenback against most trading partners as market favorite Clinton's chances of winning the US election have grown over the weekend.

Meanwhile, the Presidential candidate has been cleared by the Federal Bureau of Investigation (FBI) against all allegations on her use of a private email server while in government. The global dollar index rose to 97.462 from the previous close of 97.065.