Indonesia reduces GDP growth forecast

Jakarta mosqueIndonesia’s economy is expected to grow by 5.9 to 6.1 per cent in the second quarter of 2013, the country’s central bank said on June 7 in a statement.

The forecast is slightly below the 6.2 per cent reached in the first quarter.

For the entire year 2013, the bank has revised down the economic growth target to between 6.2 and 6.6 per cent from 6.3 to 6.8 per cent due to a decline on consumption and investment in response to the global economic slowdown, Bambang Brodjonegoro, head of fiscal policy at the Indonesian finance ministry, said.

The central bank has kept its benchmark interest rate on a record low of 5.75 per cent for a fifteenth straight month at the beginning of May to help spur economic growth amid rising inflation pressure.

The government is set to increase subsidised-fuel prices at mid- June to ease pressure on the state budget that allows the country to set aside more funds for infrastructure. High fuel subsidies have put pressure on Indonesia’s fiscal structure as it widens the trade deficit gap, weakens the rupiah and pushes imported inflation.

This, in turn, prompted the central bank to use more of its foreign exchange reserves to balance the rupiah exchange rate.



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Indonesia's economy is expected to grow by 5.9 to 6.1 per cent in the second quarter of 2013, the country's central bank said on June 7 in a statement. The forecast is slightly below the 6.2 per cent reached in the first quarter. For the entire year 2013, the bank has revised down the economic growth target to between 6.2 and 6.6 per cent from 6.3 to 6.8 per cent due to a decline on consumption and investment in response to the global economic slowdown, Bambang Brodjonegoro, head of fiscal policy at the Indonesian finance ministry, said. The central bank...

Jakarta mosqueIndonesia’s economy is expected to grow by 5.9 to 6.1 per cent in the second quarter of 2013, the country’s central bank said on June 7 in a statement.

The forecast is slightly below the 6.2 per cent reached in the first quarter.

For the entire year 2013, the bank has revised down the economic growth target to between 6.2 and 6.6 per cent from 6.3 to 6.8 per cent due to a decline on consumption and investment in response to the global economic slowdown, Bambang Brodjonegoro, head of fiscal policy at the Indonesian finance ministry, said.

The central bank has kept its benchmark interest rate on a record low of 5.75 per cent for a fifteenth straight month at the beginning of May to help spur economic growth amid rising inflation pressure.

The government is set to increase subsidised-fuel prices at mid- June to ease pressure on the state budget that allows the country to set aside more funds for infrastructure. High fuel subsidies have put pressure on Indonesia’s fiscal structure as it widens the trade deficit gap, weakens the rupiah and pushes imported inflation.

This, in turn, prompted the central bank to use more of its foreign exchange reserves to balance the rupiah exchange rate.



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Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

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