Indonesia's economy is forecast to grow at a slower rate in the first quarter of this year. (Source: asia-first.com)

Jakarta (VNA) - Indonesia's economy is forecast to grow at a slower rate in the first quarter of this year despite the government's efforts to boost buying power and exports.

Indonesian Chief Economic Minister Darmin Nasution said on March 19 that he estimated the country's gross domestic product (GDP) in the first three months will grow lower than 5.01 percent, the pace recorded in the same period last year.

Nasution explained that the country's harvest season of rice will take place in April, instead of March, reducing contributions of the farming sector to the national economy.

The government has decided not to raise fuel price in the first quarter and would keep electricity prices steady by year end, in an effort to boost people’s buying power in the country where consumption accounts for over half of GDP growth.

Nasution said credit growth which has yet to completely recover in the period will affect the performance of the retail sector as well as its contributions to the national economy.

He added that slow demand of loans indicates the economy's slowing growth. In February, loan growth was recorded at 8 percent year-on-year.

Official statistics in February 2018 revealed that Indonesia’s economy grew 5.1 percent in 2017, a slight increase as compared with 5.0 percent in 2016 in the context that Indonesia’s central bank cut interest rates. However, many experts have not pinned high hope on high economic growth this year.

The economy in the fourth quarter of 2017 expanded higher than the forecast thanks to a pick-up in private consumption, government spending and investment growth, which more than offset a pullback in net exports, said Gareth Leather, senior Asia economist at research house Capital Economics.

Leather said Indonesia's economic growth was likely to remain at around 5.0 percent this year and in 2019. - VNA