The Asian Development Bank (ADB) has lowered its predicted 2015 economic growth for Indonesia to 4.9 percent, lower than its prior 5.5 percent forecast due to domestic and global economic pressure.

ADB Deputy Country Director in Indonesia Edimon Ginting pointed out that sluggish infrastructure and household investment and government expenditures over a long period, coupled with reduced exports due to weakened external demand, have dampened the 2015 economic growth.

However, the Indonesian economy is predicted to see higher growth in 2016 at 5.4 percent thanks to improved government consumption and investment through recent economic packages.

Ginting noted that the Indonesian government has made efforts to improve its budget execution by simplifying land acquisition procedures and advancing the tendering process for procurement in most public projects.

Policy reform initiatives, the loosening of investment licensing and increased efforts to encourage private investment in selected infrastructure projects are expected to stimulate private investment, he said.

Ginting also warned of possible risks, including slow government investment and reform together with reduced demand from export markets and the instability of the global financial market.

Indonesia’s Chamber of Commerce and Industry (Kadin) also predicted about 5 percent growth this year, though the country’s Ministry of Finance has proposed reducing the economic growth target for 2016 to 5.3 percent from 5.5 percent.-VNA