Jakarta – Indonesia's economic growth leveled off slightly in the second quarter as an investment slowdown and lower exports wiped out the boost from the elections and festive spending, according to data the national statistics agency released on Monday.
Southeast Asia's largest economy expanded 5.05 percent in the April-June period, compared with 5.07 percent in the previous quarter.
That was the slowest pace in the past six quarters and a far cry from the government's 5.2 percent target for this year.
The April presidential and legislative elections, followed by Ramadan and the Idul Fitri holiday in May and June, provided a much-needed boost to domestic demand as private consumption rose 5.17 percent and government spending jumped by 8.2 percent.
Yet, investment only grew 5.01 percent in the period, while imports, two-thirds of which comprised raw materials and machinery for Indonesian industries, contracted by 6.7 percent.
Declining commodity prices and lower demand in the global market also pressured the country's exports, which fell 1.8 percent in the second quarter.
"It's expected that the global economy had slowed down in the second quarter. That was reflected in weak global trade and industry data," Suhariyanto, head of the Central Statistics Agency (BPS), said on Monday.
The news added to concerns in the financial market, which is already on edge after last week's latest salvo in the ongoing trade war, when United States President Donald Trump imposed tariffs on additional imports worth $300 billion from China.
The Jakarta Composite Index dropped 2.5 percent at the break on Monday, its steepest intraday close in months.
Yield of the government's 10-year bond rose to 7.5960 percent from 7.4645 percent last week, indicating a sell-off as bond yield moves inversely to price.
The rupiah slipped 0.19 percent to 14,231 to the US dollar, its lowest level in more than six weeks.