BI Expects Q2 Economic Growth of 5.1%

In the 2017 state budget, the government set a 5.1 percent growth target, but it upgraded its outlook to 5.3 percent in the revised 2017 budget

Visitors ice skate at a shopping center in Bintaro, Tangerang, Banten. Bank of Indonesia has expressed its optimism of reaching annual economic growth of 5.1 percent in the second quarter of this year on improved retail sales. (Antara/Fakhri Hermansyah)

Bank Indonesia (BI) has expressed its confidence that the country’s economy grew by 5.1 percent year-on-year (yoy) in the second quarter of this year as retail sales began to recover.

BI deputy governor Perry Wajiyo said the real sales index (IPR) in May rose by 4.3 percent yoy, slightly up from 4.2 percent yoy in April, according to its retail survey. The IPR data for June is not yet available, but BI estimates the June figure at a strong 6.7 percent.

“Retail sales improved [in the second quarter] thanks to [trading] activities during Ramadhan as well as the extra income from Idul Fitri bonuses,” Perry said Friday, as quoted by kontan.co.id.

The increase in sales was driven by food and beverage sales, which rose by 9.7 percent yoy in May and by an estimated 10.9 percent yoy in June.

The higher retail sales would have helped support second-quarter economic growth, Perry said, adding that he expected GDP growth of 5.1 percent yoy for the April-June period.

“The initial data did not show [the possibility of reaching the target], but with the latest indicators, growth in the second quarter can still be achieved,” he said.

He further predicted that the economy throughout this year may expand by 5.2 percent.

In the 2017 state budget, the government set a 5.1 percent growth target, but it upgraded its outlook to 5.3 percent in the revised 2017 budget. (dea/lnd, The Jakarta Post)