Jakarta (Antara Bali) - Bank Indonesia predicted the country's economy would grow 4.9 percent to 5 percent in the second quarter of this year or slightly falling short of the target.
"Previous estimate was slightly more than 5 percent, but latest assessment puts the growth rate at only 4.9 percent-5 percent," Executive Director for Economy and Monetary Policy of the central bank Juda Agung said here on Thursday.
Juda said the economic growth grew stronger in the second quarter of 2016 but not as stronger as previously expected.
He said the growth driver is still the household consumption, which is predicted to grow ahead of Idul Fitri, when workers receiving holiday bonuses would have more to spend.
However, contribution from non building investment has not shown significant improvement despite increase in capital spending, he noted.
Meanwhile, exports are expected to grow only slightly , he said, adding, exports of several commodities began to pick up.
"Bank Indonesia sees that a number of steps still need to be taken to boost domestic demand to strengthen economic growth," he said, without going into details.
He predicted that the country's economy would grow 5 percent-5.4 percent (yoy) in 2016.
Anticipating economic slowdown, the Central Bank has decided relaxation of monetary policy and macro prudential policy in a bid to boost demand for credit and to sustain economic growth, he said.
The relaxation of the policies is in line with the assessment of Bank Indonesia that country's macro economic condition has remained stable as reflected by the low inflation rate, current account deficit being under control and rupiah exchange rate relatively stabled. (WDY)