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Finance Ministry expects to see 5% GDP growth in Q2
Deputy Finance Minister Suahasil Nazara said strong spending and exports would prop up economic growth.
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Deputy Finance Minister Suahasil Nazara meets with representatives from "The Jakarta Post" in Jakarta on June 2. (Indonesian Finance Ministry/Andi al-Hakim)
T
he Finance Ministry expects second-quarter gross domestic product growth to reach 5 percent year-on-year (yoy), the same figure as the first quarter, as high consumption and net export sustain growth in the face of recent economic challenges.
Deputy Finance Minister Suahasil Nazara said on Thursday that the second quarter was expected to see strong spending levels as a result of eased mobility restrictions and the Ramadan-Idul Fitri festive period, improved investment growth due to escalating business activity and stronger net exports due to high commodity prices.
“If we can get that 5 percent, we are solid and will be calmer,” Suahasil Nazara told The Jakarta Post in an interview on Thursday.
In the first quarter, GDP grew 5.01 percent yoy, whereby consumption rose 4.34 percent, according to Statistics Indonesia (BPS). The second-quarter GDP figure is expected to be released in early August.
The Finance Ministry's projection comes as rising global inflation emerges as a key risk to Indonesia's economic growth, with rising prices on basic goods likely to deter spending. Economists have also listed lockdowns in China, global supply chain disruptions and monetary tightening in developing countries as additional risks.
BPS data shows that inflation reached 3.55 percent yoy in May, the fastest rate in almost five years due to the rising price of food, beverages and tobacco. However, inflation remains within Bank Indonesia's (BI) target range of 2 to 4 percent.
Coordinating Economic Affairs Minister Airlangga Hartarto said on May 11 that Indonesia's GDP would grow 3.5 to 4 percent yoy in the second quarter, a more conservative estimate compared to the Finance Ministry's.
