Aditya Suharmoko, Jakarta – Strong exports, primarily those of commodities, helped fuel Indonesia's economic growth by an unexpected 6.4 percent in the first half of 2008 as compared with the same period in 2007, the Central Statistics Agency (BPS) revealed Thursday.
Slamet Sutomo, BPS deputy chairman for balance sheet and statistical analysis, said exports in the January-June period increased by 15.8 percent from a year earlier, higher than growth in investment and private consumption at 14.1 percent and 5.5 percent respectively.
"It can be said economic growth in the second quarter of 2008 was due mainly to exports," Slamet said.
Exports grew by 16.1 percent in the second quarter, the fastest pace in three years, with June exports alone reaching an unprecedented US$12.9 billion on rising demand from India and China, countering weaker demand from the United States and Europe.
Indonesia's GDP during the second quarter of 2008 reached Rp 1,230.9 trillion ($134.08 billion), slightly higher than the Rp 1,122.1 trillion recorded in the previous three months.
The 6.4 percent growth came as a surprise to analysts, beating their consensus forecast of 6.1 percent, according to Citigroup. The government had earlier forecast the economy would grow by 6.3 percent.
However, the strong growth did not fully factor in the spiraling negative impact of the fuel price increase in late May, with analysts and business players warning the pinch would most likely be felt during the early second half of the year.
Businesses enjoying most of the robust growth during the first half included those in the transportation and communications sector, which posted a remarkable 20 percent growth as compared to the same period last year.
The electricity, gas and the clean water sector also enjoyed an 11.9 percent jump in business activities, followed by the financial, real estate and services sector with an 8.5 percent rise, according to the BPS.
Economist Faisal Basri said the growth was reflected in the double-digit percentage growth in sales of cement, cars and motorcycles, wood and steel products, particularly on demand from outside Java.
"The growth is there," he said, adding half of car and motorcycle sales and 44 percent of cement sales during the first half were from outside Java.
Faisal said between January and June, private consumption and investment remained robust, as shown by high lending growth of more than 30 percent during this period.
While regions outside Java expanded, the economy was still dominated by Java, which contributed 57.5 percent of the GDP, followed by Sumatra with 24.2 percent and Kalimantan with 9.9 percent, according to the BPS.
"The constraint is infrastructure. With better infrastructure in regions outside Java, coupled with more developed labor-intensive industries and agriculture in Java, the economy could leap further."
He urged the government to help businesses seek opportunities to expand amid the current unfavorable global economic climate.
Faisal predicted the economy would grow by slightly less than 6 percent by the end of 2008, lower than the government's expectation of 6.2 percent, with the global economic turmoil worsening and the local economy feeling the full impact of soaring prices.