JAKARTA (Feb 6): Indonesia's gross domestic product grew 4.94% in the fourth quarter to mark the slowest pace since the opening three months of last year, as household consumption cooled and government spending contracted, data showed on Monday.

Southeast Asia's largest economy also faces uncertainty surrounding US policies under President Donald Trump and in one of its other main trading partners China, even as a spate of interest rate cuts last year should start to pay dividends by supporting investment.

Indonesia's economy grew 4.94% on an annual basis in October-December, data from the statistics bureau showed, compared with 5.01% in the preceding quarter.

The growth rate was below the median forecast of a Reuters poll of 5.07%.

GDP expanded 5.02% during 2016, up from a revised 4.88% in 2015, the bureau also said. The poll had expected a full-year growth rate of 5.03%.

The government originally set a 5.3% growth target for last year. But near the end of the year, officials said 2016 growth might only be 5%.

REDUCED STATE SPENDING

Growth in the fourth quarter was helped by firmer commodity prices that increased exports, while government spending and investment contracted.

Meanwhile, the government spent 223.4 trillion rupiah (US$16.72 billion) less than planned during 2016, taking a toll on GDP expansion.

"While we think the worst is now over, with commodity prices likely to remain depressed and policymakers running out of scope to stimulate the economy further, we expect growth to remain stuck at around 5% over the next couple of years," Gareth Leather, an economist at Capital Economics, said in a report

The central bank, which has cut key interest rates six times last year to help growth, may have limited room to boost growth this year as it expects inflationary pressure at home amid global uncertainties, mainly from the United States.

Bank Indonesia (BI) is taking a "cautiously accommodative" monetary stance, from its previous bias toward easing, Governor Agus Martowardojo said on Friday.

BI cut its benchmark rate by a total of 150 basis points to 4.75%.

The government set its 2017 economic growth target at 5.1%, though is describing this as conservative. Ten analysts in a Reuters poll conducted last week gave a median forecast of 5.2% for growth this year.