BI cuts economic growth forecast to 5.5-5.9 percent

Various surveys conducted by Bank Indonesia (BI), such as those on retail sales and consumer confidence, indicate a slowdown in household consumption in the second half of the year, which in turn suggests that the nation's economic growth is losing s
Jakarta (ANTARA News) - The central bank has revised Indonesia`s economic growth forecast for 2013 from 5.8-6.2 percent to 5.5-5.9 percent.

Various surveys conducted by Bank Indonesia (BI), such as those on retail sales and consumer confidence, indicate a slowdown in household consumption in the second half of the year, which in turn suggests that the nation's economic growth is losing steam.

Various investment indicators, such as capital goods imports, sales of heavy equipment, and manufacturing industries` electricity consumption, show that non-construction investment is likely to contract in the second half of 2013.

However, real exports are expected to rise amid lower prices of Indonesian commodities.

In the future, given that the global economy is unlikely to grow at a rate as was previously predicted, BI may revise its economic growth projection for 2014 from 6.0-6.4 percent to 5.8-6.2 percent.

According to the central bank, the prevailing global economic uncertainties are likely to continue.

Global economic growth in 2013 is projected to slow down to 3.0 percent from 3.1 percent on account of sluggish economic growth in emerging markets, especially China and India.

The prices of global commodities, especially oil, are also expected to decline, while the uncertainty over tapering of U.S. monetary stimulus and the possibility of a change in the global economic order must be closely monitored, BI stated.

BI has predicted that the global economy will grow at 3.5 percent next year, lower than the previously projected 3.7 percent. (*)

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