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BI welcomes govt’s decision to cut growth target
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Bank Indonesia estimates that the economy will grow 5 to 5.4 percent this year. (Kompas.com/-)
T
he government’s decision to revise down Indonesia's economic growth target to 5.1 percent in the revised 2016 state budget draft is a wise decision, considering the persistent global economic slowdown, Bank Indonesia Governor Agus Martowodojo says.
The government and the House of Representatives are currently deliberating macroeconomic assumptions for the revised 2016 state budget draft.
"It is agreed at 5.1 percent. We feel it is a wise decision because we consider 5.3 percent growth too high. The central bank expects the Indonesian economy to grow 5 to 5.4 percent. But we leave the decision to the deliberation at the House," Agus said in Jakarta on Friday.
The Indonesian economy had a slower pace of growth in the first quarter, only 4.92 percent, lower than the 5.04 percent in the previous quarter.
Earlier, Finance Minister Bambang Brodjonegoro explained that the decision to scale down the target was due to weak private consumption, which accounted for more than 50 percent of gross domestic product (GDP).
The government has projected that consumption will expand by only 5 percent this year, lower than the initial target of 5.1 percent. In addition, private investment growth has remained slower than expected and it would be difficult to reach positive net exports due to prolonged commodity price declines. (ags)
