Economy expected to grow better in second semester

Economy expected to grow better in second semester

Suryamin, Head of the Central Bureau of Statistics (BPS) (ANTARA FOTO/Widodo S. Jusuf)

Jakarta (ANTARA News) - The Indonesian government hopes that the countrys economy would perform better in the second semester of 2015 after registering slower growth in the first semester.

Indonesias economy grew 4.67 percent in the second quarter of 2015, down from 4.72 percent recorded in the first quarter. Thus, the economy grew only 4.7 percent in the first semester of 2015.

"The economic growth in the second quarter of 2015 was lower than that in the same period last year and the previous quarter of this year, which recorded a growth of 4.72 percent," Head of the Central Bureau of Statistics (BPS) Suryamin remarked during a press conference last week, August 5.

However, the government expects the economy to grow by 5.5 percent in the second half of 2015. To achieve this, it will make optimal efforts, including boosting government spending, to improve economic activities.

Finance Minister Bambang Brodjonegoro has forecast that the economic growth in the second semester of 2015 could be increased to 5.5 percent by making maximal efforts such as expediting government expenditure both in Jakarta and the other regions to boost the economy.

"We are still making our best efforts to maintain the economic growth. We hope it would not come from public consumption but from our efforts to fuel investment both in terms of private investment and government expenditure," the minister affirmed.

By undertaking these efforts, the government has forecast that the nations economy will grow by 5.2 percent, or improve slightly from 5.02 percent growth recorded in 2014.

A similar viewpoint was also expressed by Agus Martowardojo, the governor of Bank Indonesia (BI), which is the Indonesian central bank. He forecast that Indonesias economy in the second semester of 2015 would grow better than only 4.7 percent recorded in the first semester.

"Thus, the economic growth at the end of the year could reach between 5 and 5.4 percent. Therefore, the economic growth in the third and fourth quarters should be accelerated to reach over 5 percent," the BI governor stated on Friday, August 7.

Martowardojo remarked that one of the efforts that could fuel economic growth was to expedite the realization of government expenditure, especially spending in rural areas, the disbursement for which was still hindered by bureaucratic processes.

"We are of the view that the regional governments should consolidate to realize the expenditure. The central government already has a Budget Absorption Evaluation and Supervisory Team (TEPPA). The regional governments should have the initiative to follow," the BI governor remarked.

Martowardojo hoped that the central government would provide assistance and guidance regarding the administrative system or the development of human resources to speed up government expenditure in the regions.

"We hope the central government would provide guidance, so that the realization of the budget would be effective, and leakage would be prevented," he remarked.

BPS Head Suryamin had earlier announced that the economy grew by 4.67 percent in the second quarter of 2015, slowing down from 4.72 percent in the first quarter. Thus, the economic growth in the first semester of 2015 was recorded at 4.7 percent.

Indonesias economy was measured by its gross domestic product (GDP), amounting to Rp2,866.9 trillion based on its current price in the second quarter of 2015, or Rp2,239.3 trillion under its constant price.

Suryamin explained that in terms of production, the growth was driven by almost all business sectors, with the highest achieved in the education service sector, which grew by 12.16 percent.

"In terms of expenditures, it was supported by almost all components, with the highest achieved by the household consumption spending component at 4.97 percent," he affirmed.

In terms of production, the highest growth was recorded in the agriculture, forestry, and fishery sectors, reaching 10.09 percent. Meanwhile, in terms of spending, government consumption recorded the highest growth at 32.17 percent.

Although the economy grew slower in the second quarter, the government is convinced that it will perform better in the next half of the year. It predicts that the economy can grow 5.2 percent year-on-year in 2015. This is, however, still lower than the governments growth target set in the revised 2015 state budget at 5.7 percent.

The slowdown in Indonesias economic growth took place amid the worlds economic downturns.

Therefore, President Widodo did not deny that external factors could affect Indonesias economy as observed in other countries.

"Taking our current budget spending into account, we can understand why the growth stopped at this level. The basis is 4.7 percent. From now on, it will soar," he remarked on Wednesday, last week, August 5.

The president is confident that the countrys economy will improve rapidly in the second semester of this year, despite indications of slow growth in the first.

"As we have earlier forecast, the economy grew 4.7 percent in the first semester," he said.

In the second semester, he added that the figure will be higher, in line with greater national budget spending at both provincial and district/city levels.

"It usually improves in June or July. It starts to rise a bit more in September or October, and in November, it will really shoot up," he affirmed, gesturing skyward.

After all, according to the president, Indonesias economic growth has been ranked fifth in the world amid the global economic slowdown.

"Our economy is placed among the top five in the world. So, there should be no pessimistic thoughts about the economy," he stated in his speech during the commemoration of the 38th year of reactivation of the Indonesian capital market on Monday.

What is important is to maintain the stability of the economy in order to prevent the emergence of an economic crisis.

Maintaining economic stability is one of the governments strategies to cope with the economic disorder and to prevent a crisis, according to Finance Minister Bambang Brodjonegoro.

"Stability is important. In 1997, our economic growth was extraordinary. But as stability was not maintained, the economy collapsed (at that time)," he explained here on Tuesday.

By learning from past experiences, the government is making every effort to maintain stability in order to ensure that the economy is not susceptible to external factors that may lead to volatility, he affirmed.

"If stability is maintained, we will continue to be able to do it, no matter how strong the external pressures are. Therefore, we must maintain the nations economic fundamentals, particularly fiscal sustainability," the minister stated.