Industrial Growth Decelerates in Q1
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Rabu, 16 April 2014 12:16 WIB
TEMPO.CO, Jakarta - Industrial growth in the first quarter of 2014 is expected to be slower than in the previous quarter. In addition to seasonal factors, where businesses have yet to spend their capital expenditures, industries are still waiting for the result of the presidential elections.
Juniman, chief economist of Bank Internasional Indonesia, estimated the manufacturing industry will only grow by 5.2 percent in quarter one, slower than 2013's first quarter growth of 5.34 percent. Export activities are also expected to slow from 7.4 percent at the end of last year to 6.4 percent in the first quarter of this year.
"The slowdown in the first quarter is also because many companies are still planning their production, so their operations are not running at full speed," Juniman said yesterday. He predicted the growth will accelerate in the second and third quarters, once there is a clear political map following the elections outcome.
Even so, Juniman estimated a number of sectors such as trade, hospitality and F&B, transportation, telecommunications, and retail will continue to shine with a growth of 5.8 to 7.0 percent at the beginning of the year.
Last week, Bank Indonesia (BI) released its Business Activity Survey results, which showed that the first-quarter business activity index—seen from the Net Weighted Balance—only reached 2.11 percent, far below 2013's fourth quarter of 12.61 percent. The central bank expects the index to jump to 27.27 percent in the second quarter.
Chris Kanter, deputy chairman of the Indonesian Chamber of Commerce and Industry (Kadin) for Investment, said that deceleration occurs because employers ramped up production for major events such as Christmas or New Year in the previous quarter.
"Later in the second quarter, entrepreneurs will boost production again," said Chris.
Meanwhile, Kadin's deputy chairman for Public, Fiscal, and Monetary Policies, Hari Sukamdani, said it is not unusual for the market to slowdown at the beginning of the year because consumers tend to purchases very little.
The Executive Director of the Institute for Development of Economics and Finance, Enny Sri Hartati, predicted the first quarter economic growth at less than five percent, based on the small growth of the Large and Medium Manufacturing Industry (IBS). "The IBS growth very low at just 0.13," he said.
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