Strong investment, consumption lifts Indonesian economy
Indonesia's overall economy and employment rate remain in positive growth territory thanks to increasing investment and household consumption amid the lingering global crisis that has weakened exports.
The nation’s gross domestic product (GDP) grew 6.3 per cent in the first quarter of this year compared with the same quarter a year ago, after expanding by 6.5 per cent in the previous three quarters, the Central Statistics Agency (BPS) announced.
Investment and domestic consumption contributed 87 per cent to the country’s economic growth, as they expanded 9.9 per cent and 4.9 per cent, respectively, in the first three months of this year from the same period in 2011.
“Going forward, it is imperative to consider the fact that the contribution from net exports has been almost non-existent in the past two quarters, which would only mean that the onus on growth would have to be on further expansion in domestic demand,” said Gundy Cahyadi, an economist at OCBC Bank.
Government officials and economists have warned that the worldwide economic slowdown will weaken global demand, with Indonesia seeing almost no contribution from net exports in the January–March period of this year. But rising investment has not only offset weakening exports, but also bolstered employment. Indonesia provided about 3.1 million new jobs for the country’s labour force from August 2011 to February 2012, compared with a 1.61-million decline in the number of workers in the previous six months starting February 2011.
For every 1 per cent of economic growth, some 450,000 should be created, according to an assumption made by the government and House of Representatives. – The Jakarta Post
