Jakarta: Indonesian growth slipped to its slowest pace since 2009 in the first quarter, official data showed on Tuesday, signalling a tough road ahead for President Joko Widodo to revive Southeast Asia`s top economy.
The economy expanded a lower-than-expected 4.71 percent year-on-year in the three months to the end of March, according to the statistics agency.
That was the slowest pace of growth since early 2009, and economists said it would now be hard for Indonesia to achieve its growth target of 5.7 percent for this year. The rupiah was down 0.5 percent against the dollar after the data announcement.
Widodo, who took office in October, has pledged to lift growth to seven percent annually in the coming years by attracting foreign investment and overhauling infrastructure, but analysts said the latest data highlighted the challenges ahead.
"Although we doubt growth will slow much further in the coming quarters, we are not likely to see a strong rebound either," said Daniel Martin from Capital Economics, adding further rate cuts could be on the horizon following a 25-basis point reduction in February.
Statistics agency head, Suryamin, who like many Indonesians goes by one name, said that a slowdown in China was having a major impact. China, the world`s second-biggest economy, has long been a major market for Indonesia`s key commodity exports.
A contraction in oil and coal production was also affecting growth, he said.
Growth contracted 0.18 in the first quarter from the previous three months. The economy also contracted on a quarterly basis in the final three months of 2014.
Economic growth in Indonesia, which is a member of the G20 group of leading economies, has been slowing in recent years due to slipping prices of its abundant commodities, such as coal and precious metals.
The economy expanded at its slowest pace in five years in 2014, at five percent.
Strong domestic consumption has helped underpin growth although the weakening rupiah is now affecting consumers.
