Indonesia forecasts 2019 growth of 5.1-5.5 percent

 

Jakarta (VNA) – Bank Indonesia (BI) has forecast that next year its national economy will grow at almost the same rate as this year’s estimation of 5.1 percent, and domestic consumption will continue to serve as the main engine of growth.

BI Deputy Governor Dody Budi Waluyo stated that based on current conditions, the bank hopes the economy will continue to grow within the same range as it has in 2018.

The bank had previously announced that it will downwardly revise its economic growth forecast of 5.1-5.5 percent for 2019.

Waluyo said that the current status of economic uncertainty, particularly related to the US-China trade war, will cast a shadow on the global economic growth next year.

The global economic growth will tend to stay below 3 percent, he remarked.

All countries, except the US, will witness an economic slowdown. China will also record a current account deficit for the first time ever in 20 years, reflecting the impact it will suffer largely due to trade, he stated.

Regarding future global monetary policies, Waluyo said BI is awaiting the European Central Bank (ECB) to conduct normalisation to mark the start of a tight monetary era which will have an impact on the interest rate policy in Europe. The normalisation of the high interest rate policy will continue until next year, he stated.

BI will continue to tighten its monetary policy, which will undoubtedly have an impact on economic growth. However, he noted, the policy is believed to be able to reduce the current account deficit, which has an adverse impact on the rupiah.–VNA