Jakarta: Bank Indonesia (BI) Governor Perry Warjiyo is confident that Indonesia could record a gross domestic product (GDP) growth of 5.2 percent in the first quarter of 2019.
"Our economic growth in the first quarter of 2019 would stay within 5-5.4 percent range. It would be around 5.2 percent," the BI leader told the press on Friday.
"Social assistance programs would boost public purchasing power. Household consumption would increase this quarter,"
Quoting a report from the Central Statistics Agency, Indonesian economy grew by 5.17 percent in 2018. It was Indonesia's highest annual growth in five years.
Indonesian economy is measured by Gross Domestic Product (GDP) on the basis of the current price reaching Rp14,837.4 trillion and GDP per capita reaching Rp56 Million or US$3,927.
In terms of production, the highest growth was achieved by Other Service Business Fields at 8.99 percent. From expenditure side, the highest growth was achieved by the Non-Profit Institution Consumption Component Serving Households (PK-LNPRT) at 9.08 percent.
According to BPS, Indonesian economy grew by 5.18 percent in the fourth quarter of 2018. The growth was slightly stronger than earlier expectations.
In terms of production, growth was driven by all business fields, where the highest growth was achieved by Other Service Business Fields at 9.08 percent.
In terms of expenditure, growth was driven by all components, where the highest growth was achieved by the PK-LNPRT component of 10.79 percent.
BI decided to maintain its 7-Day Reverse Repo Rate at 6.00 percent this month. The central bank also maintained the Deposit Facility and Lending Facility rates at 5.25 percent and 6.75 percent respectively.
In order to stimulate domestic demand, BI is committed to implement a number of accommodative policies such as maintaining a monetary operations strategy oriented towards increasing available liquidity by regular and scheduled term-repo transactions in addition to FX Swaps, strengthening accommodative macroprudential policy by raising the Macroprudential Intermediation Ratio from 82-92 percent to 84-94 percent in order to bolster bank financing extended to the corporate sector, accelerating financial market deepening policy, as well as strengthening payment system policy to support economic activities and financial inclusion.
In addition to that, BI will continue to strengthen coordination with the Government and other relevant authorities in order to maintain economic stability, particularly in terms of controlling inflation and current account deficit, while sustaining future economic growth momentum by catalysing domestic demand and maintaining external stability to stimulate exports, tourism and foreign capital investment.