Finance Minister Sri Mulyani Indrawati sees Indonesia' economic growth in first quarter (1Q) stood at 4.9 percent of GDP amid the COVID-19 outbreak - Photo by Finance Ministry

JAKARTA (TheInsiderStories) – Tomorrow, Statistic Indonesia will release the economic growth of the third quarter (3Q) of 2019. Finance minister Sri Mulyani Indrawati projected the growth to be at the level of 5.05 percent, or same as in a 2Q, which indicates the economy is growing stagnant.

She hope that growth in household consumption will still be around 5 percent. The ballast of the growth, the minister noted, comes from export and investment growth.

To note, in the 1Q of 2019 Indonesia’ economy recorded a growth of 5.07 percent. Then in the 2Q of 2019, the economy grew by 5.05 percent. For the first semester of 2019, the nation’ economy grew by 5.06 percent compared to last year (YoY).

The economic growth rate in the first three months  was slightly above the achievements in the same period the previous year which amounted to 5.06 percent. While for the 2Q of 2019, economic growth was much lower compared to the achievements of the second quarter of 2018 which reached 5.27 percent.

Some analysts viewed, the Indonesian economy only grew 5.01 percent in the 3Q of 2019 from last year 5.17 percent. THe prediction fromJPMorgan Chase and Deutsche Bank more lower, the nation’ economy only to grow 4.9 percent and 4.8 percent, respectively.

Previously, governor of Bank Indonesia (BI) sated, will preparing various strategies to get out of the adverse effects of the unconducive global economy conditions. With these strategy, its expected could drive the economic growth and reached this year’ target 5.1 percent.

He asserted, countries in the world are currently facing various challenges due to the global economic situation. The continuing trade war between the United States (US) and China, the increased risk of Brexit and other geopolitical risks causes the global economic growth slow.

“If the trade war continues, then world economic growth can be below 3.1 percent or even lower, 2.9 percent,” he said in one seminar in Jakarta, today.

Warjiyo really hope US and China reached a trade deal. Because if there is no an agreement, he rated, the tension will continues and give more impact to the global economy and the commodity prices.

As reported, many countries are currently implementing dovish policies, or low interest rates and continuing to add liquidity to boost their economy. These causes a high risk premium and bring the volatility on the foreign capital flows and the exchange rate.

In reducing the adverse effects of the technology, said Warjiyo, BI would accelerates financial inclusion with the digital economy, but accompanied by increased risk management such as increasing consumer protection, anti-money laundering and cyber risk.

In facing these challenges, Warjiyo explained, the central bank will implement the policy mix, between monetary and macro-prudential, through lower interest rates and property relaxation. BI also encourages the digital payment service programs in 2020.

He also proposed to the government to find new sources of economic growth in the tourism, medium and small medium enterprises, digital finance, maritime, and manufacturing sectors, which include automotive, textiles, and electronics. The next focus of BI, he adds, is to carry out economic transformation through cutting investment permits, specifically for new sources of growth.

Beside, said the governor, the country need to established bilateral or regional cooperation to drive the export, investment by looking for new markets, especially in Africa. He believed, the steps will be able to strengthen the source of growthfrom abroad. Finally, strengthening regional resilience in Asia.

With these various strategies, coupled with low inflation trends, a stable exchange rate, and current account deficit, the Indonesian economy can grow 5.05 percent by the end of this year. While, next year it can approach 5.3 percent with various policy synergies, concluded by the governor.

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