Indonesia Q2 GDP misses expectations on consumption, commodities

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* Q2 GDP growth +5.01 pct y/y, vs +5.10 pct in Reuters poll
    * Q1 GDP rise was also +5.01 pct y/y
    * Growth in trade, manufacturing and agriculture slowed

     By Nilufar Rizki and Hidayat Setiaji
     JAKARTA, Aug 7 (Reuters) - Indonesia's annual economic
growth grew more slowly than expected in the second quarter,
with growth in some key sectors slowing and pivotal private
consumption remaining sluggish.
    Southeast Asia's largest economy grew 5.01 percent in
April-June from a year earlier, slower than expected and
unchanged from the first quarter's pace.
    "The recovery is ongoing, just at a slower pace than we have
previously expected," said Gundy Cahyadi, an economist at DBS
    "Overall, we now see more downside risks to our 2018 GDP
growth forecast of 5.4 percent, even if we maintain our 2017 GDP
growth forecast at 5.1 percent for now," Cahyadi said.
    Indonesia has been struggling to accelerate growth
meaningfully to create jobs and improve the livelihood of its
250 million population. Many analysts say a 5 percent growth
rate is not enough.
    President Joko Widodo promised to revive growth to 7 percent
during his five-year term, which will end in 2019. This year, he
had to settle for a 5.2 percent growth target.
    Private consumption, which accounts for more than half of
Indonesia's gross domestic product, expanded slightly faster in
the second quarter compared to the first quarter, but grew more
slowly against a year ago.
    Suhariyanto, the head of the statistics bureau, told a news
conference on there was a slowdown in growth of debit
transactions ,which could indicate "people psychologically
holding back spending to see what's going on in the global
    By sector, growth in trade also slowed, which Suhariyanto
attributed to "a slowdown in domestic goods production and
supply of imported goods". Growth in manufacturing and
agriculture sector also cooled.
    The benchmark stock index <.JKSE> showed little reaction to
the data and maintained a 0.5 percent gain, and the rupiah
<IDR=> was also little moved.
    Ahead of the data announcement, Bank Indonesia Governor Agus
Martowardojo flagged a possibility of monetary policy easing to
add to a host of measures the central bank has taken to try to
stimulate demand.
    BI last year cut its benchmark rate <IDBCRR=ECI> six times,
to 4.75 percent, and eased lending rules. [nJ9N1G101A]
    The government has obtained parliamentary approval to
increase spending this year, including on infrastructure, which
should aid growth in coming quarters. [nL3N1KI2A0]
    But it remains to be seen if the economy would respond to
more fiscal and monetary stimulus.

 (Additional reporting by Gayatri Suroyo; Editing by Ed Davies
and Richard Borsuk)
 ((; +622129927609; Reuters


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