Indonesia's Q3 GDP growth seen up slightly from Q2

Indonesia’s central bank expects economic growth to slightly improve in the third quarter and reach a range of 5.1-5.2 per cent, a senior official told reporters on Friday.

The acceleration from the 5.01 per cent growth in the second quarter may come from improving private consumption, said Dody Budi Waluyo, Bank Indonesia’s executive director of economic and monetary policy, pointing to the result of August survey of retail sales.

Waluyo said the impact of BI’s benchmark rate cut last month to credit growth would take 2-3 quarters to materialise. Thus, it would affect 2018 GDP growth more than this year, he added.

BI last month cut the benchmark rate by 25 basis points to 4.50 per cent. The central bank’s GDP growth outlook for 2017 is 5.2 per cent and 5.26 per cent for 2018.

BI is due to review its policy and announce a decision on Sept. 22, according to Reuters.