Coordinating Economic Minister Darmin Nasution said the government maintained its growth target of 5.3 percent for 2016, in accordance with its target in the 2016 state budget. The central bank has predicted the country's economy will grow at 5.1 percent this year.

"I think it's still achievable. If we look at it from the financial point of view, BI’s forecast may be justified. But try to see it from the real sector, as infrastructure projects begin construction. We have many programs to boost the real sector, industry, fisheries, tourism," he said on Monday in Jakarta.

Darmin admitted that the 4.9 percent growth registered in the first quarter of 2016 was below expectations, but this was merely due to the shift in harvest period and not related to fundamental factors in the economy.

"As a consequence of El Nino, the harvest period has shifted to around April and May, or the second quarter of 2016. If the harvest period took place in the first quarter, the economy would have grown by better than 5 percent," he argued.

However, according to BI Governor Agus Martowardojo, the bank’s board of governors felt that the global economy was moving at a slower pace than expected, not only as a result of sluggish economic activity in developed countries but also in emerging economies.

"The weaker global economic growth will definitely impact our exports and the domestic economy," he said.

Meanwhile, BI deputy governor Perry Warjiyo said the government’s fiscal incentives had improved investment, particularly in the construction sector, which grew by 7.7 percent year-on-year in the first quarter of the year.

"The fiscal stimuli have been effective in boosting private investment and business sentiment," he said. (ags)

Popular

To my horror, it’s just a movie!

RI, Australia strengthen partnership on taxing crypto assets

Pentagon chief congratulates Prabowo on being elected President