"We hope the economy would continue to grow within the same range as in 2018," BI Deputy Governor Dody Budi Waluyo stated at a discussion on CORE Economic Outlook 2019 here on Wednesday.
BI had announced earlier that it will revise downward its economic growth forecast of 5.1-5.5 percent for 2019. However, Waluyo stopped short of divulging further details, as BI will announce it during its annual meeting scheduled for late November 2018.
Waluyo said economic uncertainty, particularly related to the US-China trade war, will cast a shadow on the global economic growth next year.
The global economic growth will tend to stay below three percent, he remarked.
"All countries, except the United States, will witness an economic slowdown. China will also record a current account deficit for the first time ever in 20 years. This reflects that China suffers the current impact, particularly from trade," he stated.
Regarding future global monetary policies, Waluyo said his side is awaiting the European Central Bank to conduct normalization to mark the start of a tight monetary era.
"That will have an impact on the interest rate policy in Europe, particularly when it will increase. Right now, we only refer to the Fed Fund Rate. The normalization of the high interest rate policy will continue until next year," he remarked.
BI will continue to tighten its monetary policy, which will undoubtedly have an impact on economic growth. However, the policy is believed to be able to reduce the current account deficit, which has an adverse impact on the rupiah, he noted.
Domestic consumption will continue to serve as the main engine of economic growth in 2019, coupled with the distribution of banking and non-banking credits.
Reporting by Citro Atmoko. Suharto
Editing by Yoseph Haryadi