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BI urges acceleration of fiscal stimulus package

  • News Desk
    News Desk

    The Jakarta Post

Jakarta | Thu, November 9, 2017 | 02:30 pm
BI urges acceleration of fiscal stimulus package Bank Indonesia deputy governor Perry Warjiyo (thejakartapost.com/Anton Hermansyah)

Bank Indonesia has called on the government to accelerate the introduction of its fiscal stimulus package to boost economic growth in the fourth quarter.

“The implementation of the fiscal stimulus [package] should be accelerated, because it is very important to boost the economy,” BI deputy governor Perry Warjiyo said on Wednesday on the sidelines of the Indonesia Sharia Economic Festival (ISEF) at Grand City Surabaya.

The fiscal stimulus package would encourage producers to boost their production of goods, instead of releasing products from their finished goods inventory, as many are currently doing.

“The producers are reluctant to increase production. They prefer to use the inventory. That's what we are seeing,” Perry said.

He said, however, that BI had seen some progress, particularly in government consumption, investment and exports, although growth had not yet reached expectations.

Central Statistics Agency (BPS) data shows that the economy grew 5.06 percent year on year (yoy) in the third quarter, lower than the central bank's expectation of 5.17 percent yoy.

A Bank Indonesia survey in October also showed weaker consumer confidence as a result of the economic condition. The consumer trust index in October fell by 3.1 points month on month to 120.7 points.

Meanwhile, consumer expectation in the next six months to April 2018 also fell by 3.4 points, as reflected in weakened expectation across the employment, business and income indexes. (bbn)

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