Hipmi blames slow budget disbursement

JAKARTA. The Young Indonesian Businessmen Association (Hipmi) has attributed the current economic slowdown in the country to slow disbursement of state budget funds for various infrastructure projects.

The economic slowdown indicated by the first-quarter economic growth was inseparable from the weak performance of budget realization at central and regional levels, chairman of the Himpi executive board Bahlil Lahadalia said here on Tuesday.

He said the economic growth both at regional and central levels still highly relied on the consumption sector.

"As a matter of fact, this sector also relies on government spending too much," he said.

The other indicators of economic slowdown in the first quarter of 2015 were a decline in food production due to the belated planting period and a shortfall in crude oil and coal production, he said.

As a result, oil refinery industry recorded negative growth, he said.

In addition, the slow distribution of goods resulted from the declining supply of imported goods and the low performance of the construction sector resulted from slow disbursement of budget funds for infrastructure projects, he said.

Chief of the Central Statistics Agency (BPS) Suryamin said the realization of infrastructure projects whose funds would be disbursed in May 2015 would help boost the economic growth in the following quarters.

BPS announced earlier in the day the Indonesian economy grew at a slower pace of 4.71 percent in the first quarter of 2015 as compared to 5.14 percent in the corresponding period last year.

"The economic growth of China as the export destination of Indonesian exports coupled with the low global oil prices and declining export and import performances have affected the economic performance in the first quarter," Suryamin remarked during a press conference.

On the production side, the information and communication sector registered the highest growth, contributing 10.53 percent to the economic growth while household consumption grew 5.01 percent.

Compared to the previous quarter, the economic growth in the first quarter of 2015 fell 0.18 percent from 5.02 percent.