Jakarta's economy slows down in second quarter

JAKARTA. Head of the Jakarta representative office of Bank Indonesia Doni P. Joewono said the economic growth of the province of Jakarta city slowed down in the second quarter of this year compared with the previous quarter.

The economy of the capital city grew only 5.96% year-on-year (yoy) in April-June period down from 6.45% yoy in the previous three months, Doni said on Tuesday.

The growth fell below the previous estimate of the Central Bank, he said, attributing slowdown to weak exports and imports and government spending. Despite the slowdown, the city's economic growth of 6.2% in the first half of the year was still higher than 5.89% yoy.

The less than expected export performance of the capital city was as a result of the weak demand in the global market for its main export commodities such as motor vehicles and ornaments. In the second quarter of 2017 Jakarta exports shrank 13.69% yoy, after a contraction of 5.84% in the previous quarter.

The government policy especially the regulation of the land transport directorate general prohibiting transport of export and import goods via toll roads during the Ied ul Fitri days from June 21 to 29 contributed to the fall in exports and imports. "The policy caused a decline in flows of goods to and from ports," Doni said.

A decline in government spending in Jakarta also contributed to the city's economic slowdown, he added. Bank Indonesia, however, predicted the increase in the country's economic growth in the first half of 2017 would continue in the rest of the year as the government spending is expected to grow driven by rise in employees' spending.

In addition the rising trend in investment is expected to continue with more infrastructure projects of the government to be implemented .

Exports and imports are also expected to increase with the improving condition of the global economy and as all roads including toll road would be open for the transport of export and import goods.