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Bank Indonesia projects GDP growth above 5% in second quarter
Increased household consumption, particularly over the peak Idul Fitri holiday season, is likely to contribute in pushing quarter-two growth above 5 percent, but analysts urge caution with regard to the central bank's optimistic projection.
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Face to face: Bank Indonesia (BI) Governor Perry Warjiyo delivers his speech during the annual BI meeting at the central bank’s hall in Jakarta on Nov. 29, 2023.
(Antara/Hafidz Mubarak A)
B
ank Indonesia (BI) Governor Perry Warjiyo expressed his optimism that the economy could see a GDP growth rate of above 5 percent in the second quarter of 2024.
Domestic consumption remained a key driver in the second quarter, he said, noting that household spending normally spiked over the Idul Fitri holiday, which fell in April this year.
“We are sure that in the second quarter of 2024, [GDP growth] will be higher than 5 percent, and that was buoyed by household consumption,” Perry said on Wednesday, as quoted by Bisnis.com.
The central bank governor added that infrastructure development from both the private and public sectors, including the National Strategic Projects (PSN), would also play a role in boosting second-quarter growth.
“With higher-than-expected economic growth of above 5 percent, we estimate there would be [capital] inflows into the stock market because the prospects are getting better,” he said.
Southeast Asia’s largest economy grew 5.11 percent year-on-year (yoy) during the first three months of 2024, thanks to a boost in consumption over Ramadan and the Feb. 14 general election as well as the disbursement of social assistance early this year, according to Statistics Indonesia (BPS) data.
The figure marked a slight increase from 5.04 percent and 5.03 percent in the fourth and first quarters of 2023, respectively. It also exceeded several forecasts, including a projected growth rate of 4.9 percent from Moody’s Analytics and 5 percent from a Reuters poll.
