Our projection of growth in the second quarter is 6.1 percent if there is no oil fuel price hike and 4.9 percent if the prices are raised."Jakarta (ANTARA News) - Bank Indonesia predicted the country`s economy would grow 5.9 percent to 6.1 percent in the second quarter (Q2) of this year, depending on the government policy in oil fuel subsidy.
The government is expected to raise the prices of subsidized oil fuels next month to curb swelling subsidies, Deputy Governor of the central bank Perry Warjiyo said here on Friday.
"Our projection of growth in the second quarter is 6.1 percent if there is no oil fuel price hike and 4.9 percent if the prices are raised," Perry said.
Perry added the central bank predicted the country`s economy would grow 6.3 percent this year driven by Idul Fitri festivities and pre-election campaigns.
Indonesia will hold parliamentary and presidential elections in 2014.
In addition, normally fiscal expansion by the government will increase by the end of a year, he said.
The planned increase in the oil fuel prices is not included in the calculation that set the 6.3 percent growth forecast, he said.
The economic growth, therefore would be lower if the fuel price hikes is included in the calculation, he noted.
Earlier the central bank said the country`s economic growth would be lower in the second quarter than in the previous quarter.
The Indonesian economy grew 6.02 percent in the first quarter of this year slowing than a growth of 6.11 percent in the previous quarter.
The slowdown was attributed to shrinking domestic demand. The consumption sector has been the biggest driver for the country`s economic growth in the past several years.
(Uu.H-ASG/B003)
Editor: Priyambodo RH
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