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Drought, slower credit hamper Q1 growth: Minister
Shifting harvests due to drought and slower bank loan disbursement triggered Indonesia's economic slowdown in the first quarter of 2016, Coordinating Economic Minister Darmin Nasution has said.
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Passersby are reflected in an electronic board at a securities firm in Tokyo. The International Monetary Fund (IMF) on April 12 downgraded its growth outlook for most regions and for the global economy as a whole. The Central Statistics Agency (BPS) has confirmed the report as Indonesia saw slower growth of 4.92 percent, compared to that in the fourth quarter of 2015 at 5.04 percent. (AP/Shizuo Kambayashi)
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hifting harvests due to drought and slower bank loan disbursement triggered Indonesia's economic slowdown in the first quarter of 2016, Coordinating Economic Minister Darmin Nasution has said.
The Central Statistics Agency (BPS) reported that the country's economy grew 4.92 percent in the first quarter of 2016, below Bank Indonesia's expectations at 5.1 percent. On a quarterly basis, the economic growth contracted by 0.23 percent from 5.04 percent in the fourth quarter of 2015.
According to Darmin, the rice harvest that usually occurs in March retreated to April-May due to prolonged drought. On the other hand, growth in bank loans was disbursed at a slower pace in the first quarter of 2016.
"The growth in the first quarter was not as high as that in the fourth quarter last year due to these factors," Darmin said at his office in Jakarta on Tuesday.
He was optimistic about seeing economic growth improve in the next quarter, following a decline in bank lending rates and more aggressive government spending.
"The lending rate has improved. The key is on how to encourage the real sector, especially as the government’s spending of the state budget will be disbursed more quickly," he added.
Earlier, BPS head Suryamin said the 4.92 percent growth in the first quarter of 2016 was better than that in the same period of 2015 at 4.73 percent. Pointing to external factors, the BPS argued that the slowdown was due to low commodity prices, the effect of China's economic slowdown and the stagnant US economy. (ags)
