Indonesia's Q2 GDP growth seen barely higher than Q1 pace

[JAKARTA] Indonesia's economy likely expanded only slightly faster in the second quarter than the first, a Reuters poll showed, highlighting challenges policymakers face getting the resource-dependent country onto a faster growth track.

The median forecast of 16 analysts in the poll was for annual growth of 5.00 per cent in April-June, compared to the 4.92 per cent reported for the first quarter.

Indonesia's central bank is less optimistic, forecasting 4.94 per cent annual growth for the second quarter. In its last policy statement, on July 21, Bank Indonesia (BI) cited no significant improvement in non-construction investment and weak exports as the main reasons for limited growth in April-June.

Late last month, BI Governor Agus Martowardojo said growth will accelerate in the second half, bringing full-year 2016 growth to 5.09 per cent. He previously said growth could be higher if the government's tax amnesty programme attracts billions of dollar back home.

The median forecast of nine analysts in the poll who gave a full-year view was 5.04 per cent growth.

Southeast Asia's largest economy grew 4.79 per cent last year, the weakest since 2009. The pace has fallen in each of the past five years.

REUTERS