Jakarta (ANTARA News) - The countrys central bank, Bank Indonesia (BI), has estimated that economic growth in the fourth quarter (Q4) of 2017 will reach 5.3-5.4 percent.
"Hence, Indonesias economic growth during 2017 will lie between five and 5.4 percent," Senior Deputy Governor of BI Mirza Adityaswara stated in Jakarta on Friday.
He noted that Indonesias economic growth in the previous two quarters of the year will be better than the initial forecast. This is indicated by a recovery in economic activities in the retail sector and the impetus on accelerating infrastructure development.
In the third quarter of 2017, BI had forecast that economic growth will lie in the range of 5.1-5.2 percent, or better than 5.01 percent in the second quarter of 2017.
"The retail sector has shown recovery. It has not been uniformly reversed, but we have already begun seeing a recovery in the construction sector, especially infrastructure," he said.
Indications of a recovery in the retail sector have been witnessed in retail sales. In September 2017, retail sales rose 2.3-2.4 percent.
Based on the results of the Board of Governors meeting for October 2017, the improvement in economic growth in 2017 was supported by an expansion in the fiscal budget through the State Income and Expenditure Budget 2017, such as the 13th payroll, as well as social assistance.
In addition, BI has monitored the extent of monetary easing that has been carried out since 2016 that has aided the recovery of domestic consumption, as the interest rate continues to decline from the banking sector.
Assistant Governor, BIs Department of Economic and Monetary Policy Head, Dody Budi Waluyo, said investments, especially those by the government, will still serve as the key drivers of economic growth this year and later contribute to boosting exports.
Government investment, through the disbursement of the 2017 revised state budget, will boost public consumption, Dody stated.
"It is forecast that consumption will be better in Q4, considering that government spending will be bigger in the last quarter and will have an impact on the consumption of the community, and the impact of monetary easing will still be witnessed over the next few months," he explained.
Source: ANTARA News