First quarter GDP estimated at 3% to 3.5%<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Bank Indonesia said the economy grew by an estimated 3 percent to
\n3.5 percent in the first quarter of this year compared to the
\nsame period last year on the back of improvements in investment,
\nexports and government spending.<\/p>\n
But household consumption, which had been expected to be the
\nmain driver of growth this year, seems to be slowing down, the
\ncentral bank said.<\/p>\n
\"While consumption showed indications of slowing, investment
\nactivity, exports and government spending showed improvements
\nover the previous quarter,\" the bank said Thursday in a
\nstatement.<\/p>\n
The government has targeted economic growth of 4 percent this
\nyear compared to 3.32 percent last year.<\/p>\n
But the Asian Development Bank said earlier that gross
\ndomestic product (GDP) growth this year would likely reach only 3
\npercent.<\/p>\n
Analysts have said that GDP growth would be higher in the
\nthird and fourth quarter as an expected recovery in the U.S.
\neconomy would further increase exports.<\/p>\n
Exports in February rose by 4.36 percent to US$4.18 billion
\nfrom $4 billion in January. This is the best export performance
\nsince October last year.<\/p>\n
The central bank also said that inflation remained a worry,
\nsignaling that interest rates would likely remain high for the
\ntime being.<\/p>\n
The central bank has been trying to guide down its benchmark
\ninterest rate from nearly 18 percent late last year to 16.70
\npercent now. But this level is still considered high.<\/p>\n
Bank Indonesia said that the serious floods in the first
\nquarter, which disrupted food distribution, and the rise in fuel
\nprices had been the main factors resulting in strong inflationary
\npressures.<\/p>\n
Year-on-year inflation in March was 14.08 percent. The
\ngovernment has targeted an inflation level of 9 percent this
\nyear.<\/p>\n
With oil prices increasing due to the current Middle East
\ncrisis, the government is likely to increase fuel prices again
\nearly next month.<\/p>\n
Elsewhere, Bank Indonesia said a relatively peaceful situation
\nand some progress with the economic reform program, including the
\nrecent divestment of the government's controlling stake in Bank
\nCentral Asia, had improved market sentiment and reduced perceived
\nbusiness risks.<\/p>\n
Bank Indonesia also said that a positive outcome from two-day
\ndebt rescheduling talks between the government and the Paris Club
\nof creditor nations on Thursday and Friday would contribute to
\nthe optimistic sentiment.<\/p>\n
The government is seeking a rescheduling facility for some
\n$5.5 billion in sovereign debts maturing this year and next to
\nhelp limit the state budget deficit to a safer level of 2.5
\npercent of GDP.<\/p>\n
\"These various indicators have in turn strengthened the rupiah
\ngradually and led to a declines in the central bank SBI rates,\"
\nthe bank said.<\/p>\n
The rupiah has strengthened to a seven-month high lately on
\nthe back of the recent positive news. The local unit closed
\nat Rp 9,530 per dollar late Thursday from 9,590 previously.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/first-quarter-gdp-estimated-at-3-to-35-1447893297",
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"sponsor": "Okusi Associates",
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