(RTTNews) - Indonesia's economy grew more than expected in the first quarter on robust government spending, official data revealed on Monday.
Gross domestic product posted an annual growth of 5.11 percent in the first quarter after rising 5.04 percent in the fourth quarter of 2023. GDP was expected to grow 5.0 percent.
Quarter-on-quarter, GDP dropped 0.83 percent in the first quarter compared to economists' forecast of 0.89 percent fall. On the expenditure-side, household consumption increased 4.91 percent. At the same time, government spending logged a double-digit growth of 19.9 percent.
At 3.79 percent, increase in investment remained subdued. Exports gained only 0.5 percent and imports moved up 1.77 percent in the first quarter.
"With economic activity likely to remain weak and concerns about inflation and the currency set to recede in the coming quarters, we expect Bank Indonesia to kickstart its monetary easing cycle in October," Capital Economics' economist Gareth Leather said. Leather forecast the economy to grow around 4.5 percent this year.
ING economist Nicholas Mapa cautioned that in the near-term, looming headwinds could sap some momentum from the economy.
Nonetheless, there is still strength in the economy with full-year growth on track to expand 5.0 percent with additional growth potential if the struggling export sector rebounds sharply, the economist added.
