Indonesia: Finance Ministry lowers economic growth projection

• May 30, 2018

Finance Minister Sri Mulyani Indrawati says the ministry is lowering its economic projection, which is in a rage of 5.17 to 5.4 percent, compared to the 5.4 percent economic growth projected in the 2018 state budget.

This Finance Ministry’s projection is lower than that of Bank Indonesia’s (BI), which is 5.2 percent.

“If BI sees that minimal growth is at 5.2 percent, we internally project growth of between 5.17 and 5.4 percent. We still want to see the dynamics in the second quarter,” Sri Mulyani said on Monday as reported by kontan.co.id.

She added that the Indonesian economy was facing changing global conditions, which were affecting all factors of economic growth.

For investment, Sri Mulyani was optimistic that growth in the first quarter would continue in the second quarter. She expected that investments would pick up in the second and third quarters.

Meanwhile, household consumption will grow by more than 5 percent in the remaining months of the year due to the disbursement of holiday bonuses to civil servants, police officers and military personnel, as well as the Asian Games and IMF-World Bank Meeting.

Credit growth that reached 8.9 percent as stated by the Financial Service Authority (OJK) was a good sign of economic growth, Sri Mulyani said.

Meanwhile, former finance minister Chatib Basri said the Indonesian economy still relied on the United States’ economic direction, especially when the Federal Reserve increased its Fed Fund Rate.“Therefore, we need to focus on the stability of the rupiah exchange rate, debt papers and stock market,” Chatib added. (bbn)

Source: http://www.thejakartapost.com/news/2018/05/30/finance-ministry-lowers-economic-growth-projection.html