Business

Indonesia's economy slows to 6.2% growth in 2012

Jakarta seaport
Image caption Exports have declined as the global economic slowdown takes its toll

The Indonesian economy, the biggest in Southeast Asia, slowed in the last three months of 2012, dragging down full year growth.

The economy grew by 6.2% last year, down from 6.5% in 2011. Fourth quarter growth was 6.1% above the previous year's, the statistics bureau said.

Indonesia has seen a fall in exports as well as a weakening currency.

However, analysts said domestic consumption continues to help offset the global economic slowdown.

"We expect that Indonesia's gross domestic product will still be affected by slower trade performance in 2013, while the domestic economy will remain the backbone to support overall growth," said Andry Asmoro from Bank Mandiri in Jakarta.

Indonesia has attracted investment in recent years mainly because it is rich in resources and has a rising middle class of consumers.

Domestic consumption, which accounts for upwards of 50% of the overall economy, helped bring in 221 trillion Indonesian rupiah ($22.8bn; £14.4bn) in foreign direct investment in 2012. That is a 26% increase from 2011 and a record high.

Large consumer firms, including L'Oreal and Toyota Motor, have announced expansion plans in Indonesia.

However, Indonesia posted its first annual trade deficit in 2012 which has put pressure on the rupiah, already among the worst performing currencies in emerging Asia in 2012.

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