Jakarta: Bank Indonesia (BI) Governor Perry Warjiyo has projected that the Indonesian economy will record a growth of 5.05 percent year-on-year for the second quarter of 2022.
"Why did it improve in the second quarter? This is because private consumption has continued to increase since the fasting month of Ramadhan," he explained at a press conference on the outcome of the periodic meeting of the Finance System Stability Committee (KSSK) III of 2022 in Jakarta on Monday.
Since Ramadhan, public mobility has improved and private consumption has increased. In addition, the nation’s export performance has also improved and the fiscal policy has stoked economic growth, he noted.
He predicted that economic growth will continue to improve in the third quarter as a continuation of the economic improvement in the second quarter of 2022.
Although the economy has improved, it has not fully recovered since private consumption began to increase during Ramadhan. Hence, the momentum of economic growth needs to be maintained, he said.
Since the economy is still in the phase of improving and core inflation is still low, the central bank decided to keep the benchmark rate unchanged at 3.5 percent during a meeting of the board of BI governors in July.
"BI continues to stay alert for the risk of high inflation expectations and core inflation in the future, and strengthen its response to the monetary policy mix needed by stabilizing the rupiah's exchange rate, strengthening monetary operations, and (controlling the) interest rate," he said.
Hence, he stressed that BI was not influenced by the Fed rate hike while deciding to change its benchmark rate although it will continue to take sentiment into account.
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