Indonesia CB Expects 5.1% Growth in Q2

Bank Indonesia has expressed its confidence that the country’s economy grew by 5.1% year-on-year in the second quarter of this year as retail sales began to recover.

BI deputy governor Perry Wajiyo said the real sales index in May rose by 4.3% yoy, slightly up from 4.2% yoy in April, according to its retail survey. The real sales index data for June is not yet available, but BI estimates the June figure at a strong 6.7%, Bernama reported.

“Retail sales improved (in the second quarter) thanks to trading activities during Ramadhan as well as the extra income from Idul Fitr bonuses,” Perry said, as quoted by kontan.co.id.

The increase in sales was driven by food and beverage sales, which rose by 9.7% yoy in May and by an estimated 10.9% yoy in June.  

The higher retail sales would have helped support second-quarter economic growth, Perry said, adding that he expected GDP growth of 5.1% yoy for the April-June period. “The initial data did not show the possibility of reaching the target, but with the latest indicators, growth in the second quarter can still be achieved,” he said.

He further predicted that the economy throughout this year may expand by 5.2%.

In the 2017 state budget, the government set a 5.1% growth target, but it upgraded its outlook to 5.3% in the revised 2017 budget.