JAKARTA, Feb 5 (AFP): Indonesia's economy, Southeast Asia's biggest, grew at its slowest pace in four years in 2013, data showed Wednesday, but beat expectations and showed signs of improvement despite being hard hit by emerging market turmoil.
Growth for the year was 5.78 per cent, the official statistics agency said, the first time the economy has expanded at less than six per cent since 2009, when it sank to 4.6 per cent following the global financial crisis.
But last year's figure, down from 6.23 per cent in 2012, still beat forecasts of 5.7 per cent growth due to a pick-up in the fourth quarter as exports surged.
Economists said they were surprised by the stronger-than-expected figure which follows a string of recent positive data, including a surge in the trade surplus and stabilising inflation.
"This better-than-expected figure is mostly due to a jump in exports in the last three months," said David Sumual of Bank Central Asia, pointing in particular to more mineral shipments before a partial export ban came into force last month.
Indonesia was one of the hardest hit countries when foreign funds were pulled out of emerging markets in the summer on fears the US Federal Reserve was poised to reduce its huge stimulus programmeme.
The Fed's bond-buying scheme, which was launched in late 2012, was credited with sparking a rally in emerging markets, with investors seeking out better returns on their profits.
But as the US economy strengthened and speculation grew the programmeme would be tapered off, investors dumped developing economy stocks and currencies, sending shock waves through emerging markets from Indonesia and India to Turkey and Brazil.
Indonesia was also affected by a slowdown in demand for exports from China and domestic factors, including a large current account deficit, surging inflation after a fuel price hike and policies criticised as nationalistic.
The Jakarta stock exchange plummeted from a record high of more than 5,000 in May to below 4,000 in September, while the rupiah lost more than 25 per cent against the dollar in 2013.
Authorities scrambled to shore up the economy, hiking interest rates 175 basis points between June and November-although analysts warned the aggressive tightening would weigh on growth.
They also introduced a raft of policies aimed at boosting confidence, such as easing rules for foreign investors in sectors including power plants, ports and airports.
Emerging market jitters have returned in recent days after the Fed implemented a second successive cut to its stimulus and negative manufacturing data heightened fears about China and the US.
A huge current account deficit has added to pressure on the Indonesian economy. The deficit widened to $9.8 billion in the second quarter, the biggest shortfall since the Asian financial crisis of the late 1990s.
