Finance Ministry predicts first-quarter growth at 6.3 pct

Jakarta (ANTARA News) - The Indonesian economy is expected to grow at a slower pace in the first quarter of 2013 as the global economy has not fully improved, according to the Finance Ministry.

"There is no reason to believe whether the economic condition this year will be better than last year," acting chief of the ministry`s fiscal policy board Bambang Brodjonegoro said here on Monday.

The ministry has predicted the first-quarter economic growth will range from 6.2 percent to 6.3 percent.

Bambang expressed hope that the global economy will begin to improve in the second half of this year and therefore, the government-set target of 6.3 percent to 6.5 percent for this year can be achieved.

"We rely on growth in the second semester. We hope there will be improvement at global level, be it (the improving price of) commodities or else," he said.

He also expected there will be certainty about subsidized fuel policy because it will have an impact on the quality of economic growth as a whole.

"Whenever policy is issued it has a positive impact on growth," he said.

Earlier, Bank Indonesia predicted the Indonesian economy this year will expand by a range of 6.2 percent to 6.6 percent, down from the central bank`s earlier forecast of 6.3 percent to 6.8 percent.

Bank Indonesia Governor Darmin Nasution said the lower-than-expected growth is the result of slow global economic recovery and low investment in non-construction projects despite strong growth of investment in the construction sector.

"On the other hand, export volume increased in line with the improving economies in a number of main trade partners, particularly China," he said.

The World Bank has predicted that the Indonesian economy will grow 6.2 percent this year, while the Asian Development Bank (ADB) has put the figure at 6.4 percent.(*)

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