JAKARTA - Bank Indonesia (BI) estimates that Indonesia's economic growth in the second quarter of 2019 will drop due to a decline in export performance.
"The escalation of trade relations tensions has affected Indonesia's export performance due to limited world demand and falling commodity prices, although a number of commodities such as chemicals, iron and steel, coal and vegetable oil are still relatively good," BI Governor Perry Warjiyo said in a press conference after the BI Board of Governors' Meeting (RDG) at BI's headquarters, Thursday (20/6).
Mr Warjiyo added that non-building investment had not increased significantly due to the impact of the slowdown in exports, although building investment continued. Meanwhile, consumption is expected to remain good due to maintained purchasing power and public confidence.
Limited domestic demand has resulted in imports predicted to decline. In the future, Mr Warjiyo continued, efforts to boost domestic demand need to be increased to mitigate the impact of the negative impact of the world economic slowdown due to tensions in trade relations.
"Overall, Bank Indonesia estimates Indonesia's 2019 economic growth to be below the midpoint of the range of 5.0%-5.4%. Bank Indonesia will take a policy mix with the government and related authorities to encourage the momentum of economic growth," Mr Warjiyo concluded. (MS)