JAKARTA (TheInsiderStories) - Indonesia’s annual Gross Domestic Product (GDP) growth is expected to rise by around 5 percent in the first quarter (Q1) of this year, better than the same period last year of 4.92 percent, driven by strong domestic consumption, Coordinating Minister for the Economy Darmin Nasution said.
Previously, the central bank, Bank Indonesia, estimated that Indonesia’s first quarter GDP would pick up 5.05 percent. However, BI Governor Agus Martowardojo said recently the growth may be below the initial estimation. Meanwhile, BI still expects full year GDP to grow within the range of 5.0-5.4 percent.
“It is because government spending is still under pressure as an impact of the government’s decision to cut State Budget last year,” he said on Monday (Mar 14).
The Coordinating Minister for the Economy Darmin Nasuton admitted that the government spending could not push GDP growth in the Q1 2017 higher as the state tax revenues are still low. At the end of last month, tax revenues were recorded Rp124.4 trillion or just 9.21 percent from tax revenues target in the 2017 State Budget worth Rp1,350 trillion.
“However, I am still optimist that the Q1 GDP growth is still better than the same period of the last year. It was 4.92 percent, but this year, it (Q1) can reach 5 percent,” he said.
He said GDP growth in the first quarter would accelerate, led by strong domestic consumption and recovering of export performance in line with higher commodity prices such as coal and crude palm oil (CPO). (RF)