President Joko 'Jokowi' Widodo confirmed on Tuesday (27/02) his nomination of current Bank Indonesia deputy governor Perry Warjiyo to fill the role of the bank's governor for the 2018-2023 period. (B1 Photo/Uthan Rachim)

Q2 GDP Growth Slower Than Expected: Bank Indonesia


JUNE 21, 2017

Jakarta. The country's central bank revised down its economic growth projection for the second quarter this year to 5.1 percent from an earlier 5.2 percent, citing sluggish exports and weaker-than-expected investment and household consumption.

Perry Warjiyo, deputy governor of Bank Indonesia (BI), said the country's export rates are likely to grow by 7 percent on an annual basis from April to June, slower than the 8 percent growth in the first quarter of 2017.

While investment in construction and infrastructure continue to grow, other sectors are still lagging behind the bank's previous estimates, Perry said.

The deputy governor now expects investment to increase 4-5 percent in the second quarter, even on the back of a 4.8 percent investment growth from January-March.

BI also noted weaker household consumption of consumer goods — which accounts for half of the country's gross domestic product — despite increased demand during the Islamic holy month of Ramadan.

"Consumption growth is still around 5 percent, though usually in the second quarter it reaches 5.1 percent. That shows household consumption growth is not as high as we expected," Perry said.

He hopes that with a government stimulus, including an annual bonus for civil servants during Ramadan known as the "13th salary," growth can pick up in the remaining two quarters of 2017.

The bank still maintains its GDP growth projection of between 5-5.2 percent for the year, assuming a rise in government spending during the third and fourth quarters.