Bank Indonesia estimates first-quarter economic growth to reach 5.2%

Bank Indonesia (BI) projects Indonesia’s economic growth in the first quarter of this year to reach 5.2%. The economic growth was sustained by consumption growth.

“The factor is private consumption, government consumption, and consumption of non-household institutions. This is related to preparation for general elections,” said BI Governor Perry Warjiyo, Friday (22/3).

Consumption continues to grow due to low inflation rates. The government’s social assistance program is a driver of household consumption.

The social assistance program has increased the purchasing power of low-income people. Perry estimates that household consumption growth can reach 5.2%.

However, Perry admitted, investment growth in the first quarter of 2019 was still slowing down. Slow investment occurs in non-construction investments.

“The pattern is that at the beginning of the year it is usually somewhat slower than the fourth quarter, and will increase in the next quarter. But investment is still quite high,” Perry said.

Perry is optimistic that Indonesia’s economic growth this year is still in line with estimates, which are in the range of 5% to 5.4%.

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