Indonesia's central bank revises down economic growth forecast

Jakarta (VNA) – Bank Indonesia (BI) has cut its 2021 economic growth forecast range for the Southeast Asian country to between 3.5-4.3 percent from 4.1-5.1 percent predicted previously.

Speaking at a press conference on July 22, BI Governor Perry Warjiyo said the lower prediction resulted from complicated developments of the COVID-19 pandemic, particularly the appearance of the Delta variant.

According to the official, Indonesia's economic growth potential remained quite good until the second quarter, fueled by an increase in exports, public spending and non-construction investment.

He said that an increase in a number of indicators in early June such as retail sales and purchasing management index showed that the economy was on the way to recovery.

Economic growth in the third quarter is forecast to be lower than the previous quarter as the Indonesian Government is tightening restrictions to slow the spread of COVID-19.

The BI governor expected growth to bounce back in the fourth quarter thanks to the acceleration of vaccination, relaxation of restrictions, and export growth potential.

Earlier this month, the Indonesian Government slashed the country’s 2021 growth projection to 3.7-4.5 percent from the earlier prediction of 4.5-5.3 percent, given the serious impacts of the latest wave of COVID-19 caused by the Delta variant and recent restrictions imposed on the two islands of Java and Bali./.