Monday, 25th September 2017

BI predicts 2018 growth rate at 5.26 percent

11th September 2017 | 5.024 Views
Jakarta (ANTARA News) - Bank Indonesia (the central bank/BI) has predicted the countrys economy to grow 5.26 percent next year, less than the government-set target of 5.4 percent in the draft 2018 state budget.

"We predict the gross domestic product (GDP) to reach 5.2 percent in 2018," BI Senior Deputy Governor Mirza Adityaswara stated at a working meeting with the government and the House Commission XI here on Monday.

He was responding to several lawmakers call for the central bank to finalize its previous forecast of 5.1 to 5.5 percent for 2018.

BI also revised its inflation target for 2018 down to 3.3 percent from its previous forecast of 2.5 to 4.5 percent. The figure is also lower than the governments inflation rate assumption in the draft 2018 state budget at 3.5 percent.

"We project the inflation rate at 3.3 percent," he added.

Mirza remarked that the increasingly lower inflation rate may help improve the countrys competitiveness. However, too low inflation is not good for the economy.

"The inflation rate is projected to reach 4, plus and minus 1, percent this year, and 3.5, plus and minus 1, percent next year or 2.5-4.5 percent. If it is below 2.5 percent, it will not be good, and if it is above 4.5 percent, it will not be good either," he said.

On the rupiahs exchange rate against the dollar, he refused to divulge the average exchange rate throughout 2018. But he predicted the rupiah to trade at Rp13,550 per dollar at the end of 2018.

"The rupiahs exchange rate is not the target of BI. The target of BI is inflation," he revealed.(*)