"The slow economic growth can be attributed to the domestic (political) noise, which affects the business climate in the country. Therefore, the government is expected to resolve the causes for the political conflicts, as well as social and security problems, soon," Deputy Chairman for Regional Empowerment of Kadin, Natsir Mansyur, said here on Monday.
He pointed out that economic growth in the first quarter of this year was recorded at below 5 percent, at 4.7 percent year-on-year.
This condition is unfavorable for the development of the domestic economy and businesses. "We all know that the absorption of the state budget is still below 20 percent, which caused the economic slowdown in the country," he remarked.
According to Mansyur, the political commotion and conflict between the Corruption Eradication Commission (KPK) and the National Police had greatly affected economic development.
"The value of money in circulation, which is used up every day, is estimated at Rp5 trillion as a result of political commotion that serves to hamper the economy from reaching the targeted growth of 5.3 percent," the Kadin deputy chairman asserted.
Apart from the significant increase in the value of the U. S. dollar against the rupiah, he added, the stock price index and peoples purchasing power had also weakened.
He further noted that other causes for the drop in the economic performance was overlapping business licensing, which disturbed the process of carrying out businesses.
"Political conflicts from the first quarter of this year seem to continue to haunt businesses in the second quarter. However, we believe that political polemics have ended now as there have been positive indications of cooperation among political elites," he affirmed.
The Indonesian economy grew at a slower pace of 4.71 percent in the first quarter of 2015 as compared to 5.14 percent in the corresponding period last year, the Central Statistics Agency (BPS) revealed last week.
"The economic growth of China as an export destination of Indonesian exports coupled with the low global oil prices and declining export and import performances have affected the economic performance in the first quarter," Chairman of the BPS, Suryamin, said during a press conference on Tuesday.
The Indonesian economy, measured by the national gross domestic product (GDP) in the first quarter of 2015, reached Rp2,724.7 trillion based on the current prices and Rp2,157.5 trillion based on the 2010 constant prices, he noted.
In the first quarter of 2015, the Indonesian economy grew by 4.71 percent year-on-year, recording a drop of 0.18 percent from the 5.14 percent recorded in the same period last year.
On the production side, the information and communication sector registered the highest growth, contributing 10.53 percent to the economic growth, while household consumption grew 5.01 percent.
Compared to the previous quarter, economic growth in the first quarter of 2015 fell 0.18 percent from 5.02 percent.
Spatially, the economic structure in the first quarter of 2015 was dominated by the provinces of Java and Sumatra, Suryamin pointed out.
"Provinces in Java were the largest contributors to the national GDP at 58.30 percent, followed by Sumatras provinces at 22.56 percent, and Kalimantans provinces at 8.26 percent," he stated.