Indonesian president looks to quicken spending as economy slows

JAKARTA (Reuters) – Indonesian President Joko Widodo will meet his economic team later on Wednesday to discuss ways to quicken the pace of government spending, palace officials said, a day after data showed economic growth at its weakest annual pace since 2009.

Widodo is expected to meet with his chief economics and finance ministers at around 2 p.m. (0700 GMT). Officials said this was not an unusual meeting as the president often calls on cabinet ministers to discuss issues of the day.

“Today’s meeting is around speeding up government spending,” a palace official told Reuters. He declined to be named as he is not authorized to speak to the media.

The president is also meeting separately with central bank governor Agus Martowardojo, but a Bank Indonesia spokesman said it was not related to Tuesday’s economic data.

The economy grew a slower-than-expected 4.71 percent in the January-March quarter from a year earlier, hit by a collapse in commodities and weak government spending. Growth was below a median forecast of 4.95 percent in a Reuters poll and slower than fourth quarter growth of 5.01 percent.

Widodo, who came to power six months ago with high hopes and a promise to beef up the country’s creaking infrastructure, has been hamstrung by rifts inside his own political party and squabbles between government agencies.

While Widodo has slashed fuel subsidies and freed up billions of dollars for long-neglected capital spending, many infrastructure projects are tied up in red tape.

As of April 25, the government has spent only 7 trillion rupiah ($537.8 million), or 2 percent, of its 290 trillion rupiah budget set aside for infrastructure spending.

(Reporting by Gayatri Suroyo and Randy Fabi; Editing by Jacqueline Wong)

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