Jakarta: Coordinating Minister for Economic Affairs Darmin Nasution strongly believes that Indonesia's economic growth in the first quarter of 2019 could reach 5.1 percent.
Last year, the country's gross domestic product (GDP) grew by 5.06 percent in the first quarter. Annually, The nation's GDP grew by 5.17 percent throughout 2018.
"It should be higher than last year," the minister said here on Friday.
The Bank Indonesia (BI) Board of Governors agreed to hold the BI 7-Day Reverse Repo Rate at 6.00% this month. It also decided to maintain the Deposit Facility (DF) and Lending Facility (LF) rates at 5.25% and 6.75% respectively.
According to the central bank, economic growth in the United States is moderating on lower incomes and retreating business confidence, limited fiscal stimuli as the impact of the corporate tax cuts fades, and ongoing structural labour market issues. Similarly, China’s economy is still decelerating although the authorities have implemented expansive fiscal policy in the form of tax reductions and infrastructure development.
As the result, global economic gains are occurring more slowly than expected with less financial market uncertainty. Congruent with global economic moderation, world trade volume and international commodity prices are tracking downward trends, notwithstanding the oil price, which increased during the previous period due to geopolitical factors.
On one hand, global economic developments represent a clear challenge in terms of stimulating exports. Yet on the other hand, less global economic uncertainty has attracted foreign capital flows to developing economies including Indonesia.
At home, strong consumption growth is expected to persist on maintained public purchasing power and continuing fiscal stimuli, including social aid disbursements and election spending. Alought it has declined slightly in line with seasonal trends at the beginning of the year, investment is predicted to regain momentum in subsequent periods, supported by improving business confidence and ongoing infrastructure development projects.
Moving forward, the promising domestic economic outlook is supported by solid domestic demand in line with maintained confidence in the national economy. Furthermore, the policy mix instituted by Bank Indonesia, the Government and other relevant authorities will continue to sustain economic growth momentum, which Bank Indonesia projects in the 5.0-5.4% range in 2019.