Indonesian Economy Faces Hurdles, BPS Says

TEMPO.CO, Jakarta - Indonesia's economic growth rate is predicted to decrease from 5.21 percent on the first quarter of 2014, to just below five percent in the first quarter of 2015. Sasmito Hadi Wibowo, Deputy if Statistics Distribution and Services of the Central Statistics Agency (BPS), main hurdles of Indonesia’s economic growth came from the mining, agriculture and construction sector.

Sasmito said the economic slowdown occurred while the country is experiencing trade balance surplus, low inflation, and growing industrial sector. Sasmito said that currently, the only driver of economic growth is the manufacturing industry sector. "Medium and large-scale manufacturing industry could grow by 5.05 percent in the first quarter," Sasmito said.

Sasmito explained that the improvement of medium and large-scale manufacturing was supported by the production of metal and machinery products, which increased by 13.01 percent. In addition, electrical appliances and chemical goods production also experienced a 10.13 and 9.75 percent increase, respectively.

On the other hand, several industries had experienced a decrease in production, including paper (4.04 percent), rubber and plastics (3.94 percent), and garment industry (three percent).

Similar to Sasmito, Finance Minister Bambang Brodjonegoro confirmed that Indonesia's economic condition during the first quarter of 2015 had experienced a slow down. Last week, Bambang said that economic growth rate is predicted to be below five percent. However, the Minister said that he expected the economy to recover in the second quarter of 2015 after the government started to make expenses. "Hopefully, there will be a multiplier effect from government spending, especially in the infrastructure sector," Bambang said.

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