Indonesia's second quarter GDP crashed to 5.8%

Blame it on sluggish private consumption and investment.

According to BBVA Research, Indonesia's second quarter GDP came in at a lower-than-expected 5.8% (BBVA: 6.0%; consensus: 5.9%) on weaker private consumption and investment.

Here's more:

The outturn is the fourth consecutive quarter of slowing growth, after peaking at 6.4%% in Q2 last year. The slowdown reflects the impact of uncertainty about the timing of an administered fuel price that took effect in June and subsequent inflation (8.6% y/y in July), hikes in interest rates by Bank Indonesia (75 bps in May and June), and weaker commodity prices.

The currency has also been under downward pressure from capital inflows, and at 10,250 per USD is at its lowest level since September 2009. We still expect growth to reach around 6% in 2013 and 6.2% in 2014 on the strength of domestic demand.

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