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Jakarta Post

BI predicts lower GDP growth in first quarter

  • Grace D. Amianti

    The Jakarta Post

Jakarta   /   Thu, February 23, 2017   /  05:10 pm
BI predicts lower GDP growth in first quarter Workers move bags of cement onto a ship in Jakarta. Government expenditure, a gross domestic product component, is predicted to slow in the first quarter and affect various projects. (Bloomberg/Dimas Ardian)

Bank Indonesia (BI) has projected the economy may see slower growth in the first quarter than its previous prediction of 5.05 percent year-on-year (yoy) on account of weak push in government spending.

BI Governor Agus Martowardojo said on Thursday that government spending usually helped drive the country's economy, but added that the push from such a component had been dwindling owing to seasonal factors at the beginning of the year, when government expenditure was usually lower than in the previous quarters.

The central bank has yet to calculate the exact growth figure.

(Read also: Indonesia’s GDP to reach $9.1 trillion by 2045: Jokowi)

Experts previously said there would be lingering impact from lower government spending caused by budget cuts worth Rp 137 trillion (US$10.25 billion) last year, so as to maintain a manageable deficit and to push efficiency.

BI projects the gross domestic product (GDP) will grow between 5 percent and 5.4 percent this year, higher than the government's target of 5.1 percent.

Despite the lower prediction, BI's latest assessment found that exports as one of economic components would improve in the first three months of the year owing to recovery in some of the country’s primary commodities, such as coal and crude palm oil (CPO). (tas)


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