JAKARTA (Yosefardi) – Bank Indonesia (BI) predicts the Indonesian economy to grow by 5.77% (year on year) in first quarter of this year, lower than 6.02% at the same period of last year.
BI views that the Indonesian economy is moving on positive track, in line with expectation, as reflected by declining of inflation and trade surplus.
BI also looks on the global economic developments and risks while ensuring the stability of domestic economy through improving the structure of economy and managing the foreign debts, mainly foreign debts of private sector.
The external and local demands are growing. In first quarter of this year, the household consumption increased, partly supported by the activities of the election.
The export was also in positive trend, mainly led by export of manufactures along with the economic recovery of the developed countries.
The investment of private sector is expected to grow in second half of this year. Overall, BI projects the Indonesian economy to grow by 5.5-5.9% this year.
Meanwhile foreign capital inflow totaled US$5.8 billion in first quarter of this year. The foreign exchange reserves reached US$102.6 billion as of March 2014, equal to 5.9 months of import of goods or 5.7% of import and the government’s foreign debt payment.
BI targets to cut the current account deficit to below 3.0% of gross domestic product (GDP) this year. While Asian Development Bank predicts the Indonesian economy to grow by 5.7% this year and 6% next year.