Economy Predicted To Grow But Less Than Expected: Central Bank

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)