Jokowi's growth goal for Indonesia elusive as GDP rises 5.3 per cent

[JAKARTA] The Indonesian economy is offering little cheer for President Joko Widodo as he gears up to run for a second term.

Gross domestic product rose 5.3 per cent in the second quarter from a year earlier, the statistics bureau said in Jakarta on Monday. While that was better than the 5.1 per cent median estimate in a Bloomberg survey, it's nowhere near the 7 per cent goal Widodo set for himself when he took office in 2014.

Time is running out for Widodo, known as Jokowi, to stimulate the economy as the presidential and parliamentary elections approach next year. He is focused on shoring up foreign-exchange reserves to support a currency that's weakened more than 6 per cent this year amid a deepening emerging-market rout and a widening current-account gap. He also has to counter charges by the opposition of economic mismanagement.

"It's unlikely for the economy to take off and growth of 5 per cent seems the most reasonable," Gareth Leather, senior Asia economist at Capital Economics Ltd. in London, said before the data was released. "The sharp fall in the rupiah, the interest-rate hikes -- these are going to weigh on demand and be a drag on the economy."

Key Points Gross domestic product rose 5.3 per cent in the second quarter from a year earlier The median estimate of economists surveyed by Bloomberg was for growth of 5.1 pe rcent Compared with the previous quarter, GDP rose 4.2 per cent; economists estimated a 4.1 per cent gain

The central bank has increased its benchmark rate by 1 percentage point since May to help stabilize the currency, a move that banks like Goldman Sachs Group Inc. say will curb growth.

BLOOMBERG