Perry Warjiyo, Deputy Governor of Indonesia's central bank (Bank Indonesia), believes Indonesia's gross domestic product (GDP) growth in the second quarter of 2017 will not be as high as earlier predicted because there has been a correction in Indonesia's export performance.
Earlier Bank Indonesia said to expect Indonesia's economic growth to range between 5.1 - 5.2 percent year-on-year (y/y) in the second quarter of the year. However, Warjiyo assumes Indonesia's export performance has weakened in Q2-2017, while non-construction investment remained bleak. Therefore, the actual figure may have difficulty to reach 5.1 percent (y/y).
Warjiyo said investment in the construction and infrastructure sectors is "doing fine" but it is bleak investment in non-construction that undermines accelerating economic growth in Southeast Asia's largest economy. Earlier, Bank Indonesia had expected to see stronger growth of non-construction investment.
Rising household consumption amid - and ahead of - the Ramadan month and the Idul Fitri celebrations is expected to keep Indonesia's economic safely above 5 percent (y/y) in Q2-2017. During the Ramadan (the holy fasting month) and Idul Fitri (the celebrations that mark the end of the Ramadan), demand for food products and other consumer goods (such as clothes, bags and shoes) rises.
Indonesia's Quarterly GDP Growth 2009-2017 (annual % change):
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Source: Statistics Indonesia (BPS)