BI No Longer Calls Economic Growth Bias Up, What Is This Sign?

JAKARTA - The press conference of the Board of Governors (RDG) of Bank Indonesia (BI) stated that the monetary authority remains confident that economic growth of 4.5 percent to 5.3 percent year on year (yoy) can still be achieved this year.

BI Governor Perry Warjiyo said the indication was already seen in the realization of growth in the first quarter with encouraging results.

"Economic growth in the first quarter of 2023 reached 5.03 percent of gross domestic product (GDP)," he told reporters in Jakarta, Thursday, May 25.

However, the statement from the Board of Governors this time was quite different because it did not include a tone of optimism "economic growth is biased upwards". For this, Perry gave an explanation.

According to him, the score at the beginning of the year was still quite good because it was driven by public consumption, especially ahead of Ramadan and the first week of the fasting month.

"In addition, our exports are still okay," he added.

The source of pressure is on the investment side. Perry revealed that if you look at macro investment in Indonesia, it grows well.

"Overall investment is good. But if we break it, the investment in buildings (construction and real estate) is low. This is what we continue to monitor," he said.

BI bosses are worried that this condition will continue in the following quarters or even until the end of the year.

"Investasi bangunan ini apakah akan tetap rendah seperti triwulan I atau akan tumbuh. Itulah yang membuat kami melakukan kajian-kajian terbaru, tegas dia.

Perry noted that investment credit grew by 10 percent yoy in total with the main contributor being the mining, industrial and service sectors.

"For the second quarter of 2023 (economic growth estimates) are still high, around 5.1 percent of this can be (because there is Eid momentum). But we have to see again how the investment pattern is, so we don't put the sentence on top of it," he said.