"The national economy expanded 5.05 percent (yoy) in the second quarter of 2019, relatively unchanged as compared to 5.07 percent (yoy) recorded during the previous period," Bank Indonesia (BI) Communication Department Executive Director Onny Widjanarko noted in a statement in Jakarta on Tuesday.
The latest economic developments were influenced by rising domestic demand against a declining external sector.
Widjanarko affirmed that the domestic demand had increased on the back of rising consumption and stable investment, although inventories had declined.
In the meantime, the external sector was weighed down by decreasing exports as a corollary of global economic moderation and fresh fears over a potential furtherance of the trade war.
Solid domestic demand was the main driver of economic growth in the second quarter of 2019. Household consumption accelerated, from 5.02 percent (yoy) in the first quarter of 2019 to 5.17 percent (yoy) in the reporting period, backed by controlled inflation and maintained consumer confidence,Widjanarko stated.
Government consumption also posted gains at 8.23 percent (yoy), while non-profit institutions serving households (NPISH) maintained strong consumption growth at 15.27 percent (yoy), induced predominantly by the impact of the recent general election.
Widjanarko noted that stable investment growth was recorded at 5.01 percent (yoy) compared with 5.03 percent (yoy) in the previous period.
In contrast, the external sector was characterized by export and import contractions, reaching 1.81 percent (yoy) and 6.73 percent (yoy) respectively.
Sectorwise, the key drivers of economic growth were the Primary Sector, led by Agriculture, Livestock, Forestry and Fisheries, as well as the Tertiary Sector, namely Other Services, Transportation & Trade and Information & Communication.
Bank Indonesia views the latest economic developments in Indonesia during the second quarter of 2019 as positive despite the looming threat posed by global economic moderation.
Moving forward, efforts to stimulate domestic demand, including investment, must be increased in order to mitigate the adverse impact of the global economic slowdown.
Bank Indonesia will continue to strengthen coordination with the Government and other relevant authorities to maintain economic stability, stimulate domestic demand as well as boost exports, tourism and foreign capital inflows, including Foreign Direct Investment (FDI). Related news: Indonesia's economic growth pace clocked at 5.05 percent in Q2
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