JAKARTA, NNC - Bank Indonesia estimates the economic growth rate throughout the third quarter of 2018 to be around 5.1 percent or slower than the second quarter of 2018, which was 5.27 percent, because export performance tends to fall.
"The growth rate (third quarter) will be similar to the first quarter figures, around 5.1 percent less," said BI Senior Deputy Governor, Mirza Adityaswara at a press conference for the Board of Governors Meeting in Jakarta, Tuesday (10/23/2018).
Because the projections in the third half of this year, the Central Bank predicts for the whole year, Indonesia's economic growth rate will be at a lower bias of 5.0-5.4 percent.
According to a BI study, the weakening of export performance up to the third quarter was due to the decline in prices of two mainstay commodities, namely palm oil products and the dynamics of coal prices.
When the export value weakened, Indonesia's import performance actually rose. Mirza sees the increase in import demand is still reasonable because it meets the needs of long-term infrastructure development.
"So on the one hand our commodity prices are weakening, on the other hand of oil importers and oil prices are rising, it makes the value of our oil imports increase," Mirza said as quoted by Antara.
Negative reversal between import and export performance also caused the current account deficit to be depressed. However, the Central Bank believes that the current account deficit at the end of the year will still be below three percent of the Gross Domestic Product.
Until the end of the second quarter of 2018, the current account deficit widened to around three percent of GDP.
In the remainder of the year, the Central Bank affirms that the monetary policy position will maintain the balance of payment. The balance of payments depends on the current account balance and also the financial transaction balance.