BI sees Q1 GDP growth at 4.3-4.8%

The Jakarta Post, Jakarta

The central bank has predicted economic growth of 4.8 percent in the first quarter of this year from the same period last year, citing strong domestic consumption and an expected improvement in exports.

"Based on the development of various macroeconomics indicators throughout January, Bank Indonesia sees the economy improving in the first quarter of the year," it said in a statement issued after its monthly board of governors meeting.

"Economic growth is predicted to be in the range of 4.3 percent to 4.8 percent during the quarter, in line with the (central bank) forecast at the beginning of the year."

Predictions of increased domestic consumption, according to the central bank, were based on the results of its consumer survey, which saw consumer confidence in the economy improving.

Domestic consumption has been the main driver of the economy in the past several years, accounting for about 70 percent of the country's gross domestic product.

The central bank also sees exports, another growth engine, improving in the first quarter, assuming the current global economic recovery process is maintained.

"In accordance with the improving world economy -- as can be seen in the steady rise in global trade volume and the prices of non-oil and gas commodities, exports will also improve as we earlier predicted," the statement said.

Exports and investment have been generally weak over the past several years due to various problems both at home and overseas. This has caused the economy to grow at an unspectacular less than 4 percent over the last couple of years. Analysts have said that investment and exports must increase to allow the economy to enjoy a higher growth rate of 6 percent to 7 percent, which is necessary to provide jobs for the millions of unemployed.

Bank Indonesia also expects inflation to remain low and the rupiah to stabilize against the U.S. dollar in the range of 8,300 to 8,500.