The decline in the first-quarter growth will be triggered by inflation from administered prices which will put public consumption under pressure, Executive Director of the Institute for Development of Economics and Finance (INDEF) Enny Sri Hartati said here on Monday.
"The administered prices will put pressure on consumption so the first-quarter growth is predicted to reach 4.9 percent," she said.
The governments policy to raise prices simultaneously will curb household consumption which is the key component of the national economic growth, she said.
"The administered prices should not be raised simultaneously. Right now the prices of other goods have also been on the increase," she said.
Just in January 2017, the government raised fees on vehicle ownership documents (BPKB) and vehicle registration document (STNK), electricity tariffs and fuel oil prices.
To encourage sustainable economic growth, the government should not issue policies which may raise the prices of goods, he said.
"If the increase in administered prices is not controlled, it will undoubtedly cur household consumption," she said.
Earlier in the day, the Central Statistics Agency (BPS) announced the economy expanded 4.94 percent in the fourth quarter of 2016, bringing the national growth to 5.02 percent for all of 2016.(*)
Editor: Heru Purwanto
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