JAKARTA: Indonesia posted its slowest rate of quarterly growth in two years on Monday as Southeast Asia’s biggest economy feels the sting of US-China trade tensions.

Growth weakened to 5.05 per cent in the April-June period as exports and investment slipped. That was down from a 5.27pc expansion in the same period last year.

Indonesia is grappling with weaker prices for key commodities like coal and palm oil, as the global economy falters on the back of US intensifying trade war with China.

“The challenges we’re facing are not easy to overcome due to a significant slowdown in the global economy,” said statistics agency head Suhari­yanto, who goes by one name.

The sagging growth serves up a fresh challenge to Indonesian President Joko Widodo, who was re-elected earlier this year largely on his infrastructure-driven bid to energise the economy.

But he failed to hit a promised 7pc target during his first term and could struggle to lift the economy off its current level, analysts said.

“Monthly indicators show signs of moderating domestic demand and against the backdrop of renewed escalation in trade tensions between the US and China, the outlook for Indonesia’s exports remains bleak,” re­­search house Oxford Eco­nomics said in a report.

Published in Dawn, August 6th, 2019