Jakarta  - Indonesia's annual economic growth in the third quarter slowed from the second as the global financial crisis weighed on export demand, particularly for its commodities, media reports said Tuesday.

According to the Central Statistics Agency (BPS), the economy expanded 6.1 per cent year-on-year in the third quarter, slowing from 6.4 per cent growth seen in the preceding three months. However, that was better than the expected growth of 5.9 per cent.

Quarter-on-quarter, Indonesia's gross domestic product grew 3.5 per cent, faster than the 2.4 per cent growth seen in the second quarter. It was also quicker than the 3.38 per cent increase predicted by economists.

"It can be said that there was no increase in exports (in the third quarter of 2008 from the previous three months). But the economic growth of other countries is slowing as well," The Jakarta Post quoted BPS chairman Rusman Heriawan as saying.

The agency said exports were declining as major importers cut demand in line with with the global economic downturn.

Exporters in Indonesia, the world's biggest producer of palm oil and the second-largest maker of rubber, are reeling from a slump in commodity prices amid recessions in the United States and Europe.

Heriawan said that the economy would slow further in the last quarter of 2008, but was still capable of achieving full-year growth of slightly above 6 per cent.

The government has announced that it will cut prices of subsidized premium fuel by 500 rupiah (75 US cent) to 5,500 rupiah beginning on December 1, with the agency estimating the cut will help raise people's purchasing power.

Finance Minister Sri Mulyani Indrawati has said that Indonesia's economic growth may ease to as low as 5 per cent next year as the world tilts toward a recession. (dpa)