BI cuts economic growth forecast for 2014

JAKARTA. Bank Indonesia (BI) has revised Indonesia’s economic growth outlook in 2014 to between 5.5 and 5.9 percent from an earlier forecast of between 5.8 and 6.2 percent.

“Household consumption growth is predicted to be lower than what had been predicted before as the upcoming election will likely only have a limited impact compared to the previous elections,” the central bank’s executive director for communication, Tirta Segara, in a press conference in Jakarta on Thursday, as quoted by Antara.

He said BI also predicted that investments would begin to grow in the second semester of this year, instead of the first semester as what had been projected before.

“Investment, including non-infrastructure investment, is predicted to increase again, especially starting from the second semester of this year,” said Tirta.

BI, however, predicted that real exports would be on an increasing trend although it would not as strong as what had been predicted before, temporarily impacted by the implementation of the newly revised mineral and coal law, he said,

“Indonesia’s balance of trade in January recorded a deficit of US$0.43 billion and it was mostly affected by seasonal patterns which reduced exports of prime non-oil and gas commodities and the implementation of the mineral and coal law,” said Tirta, adding that the deficit was predicted to be only temporarily in nature.

BI was also optimistic that this year’s current account deficit could be pushed down to below 3 percent of gross domestic product (GDP).

In 2013, BI predicted that economic activities related to the 2014 election would create economic opportunities amounting to Rp 44.1 trillion or higher than election expenses in the 2009 election, which reached Rp 43.1 trillion. (ebf)