Bank Indonesia Predicts Growth Weaker In 2Nd Quarter

Jakarta, June 13 (Antara) - Bank Indonesia predicts the country`s economy grows weaker in the second quarter to the low side of the range of 5.9 percent to 6.0 percent in line with a slowdown in the global economy. The central bank`s governor, Agus Martowardojo, said here on Thursday the protracted crisis in Europe and the economic slowdown in China had the potential to push global economy to move further downward. The trend, he said, would affect exports and investment especially investment in the non-construction sector. Household consumption and construction investment however would remain strong enough to drive growth, he added. On external side the Indonesian balance of payment in the second quarter is predicted to be better supported by a quite big surplus from the financial and capital transactions after suffering a deficit in the first quarter. The surplus in the financial and capital transactions was driven by inflows of direct investment and portfolio in line with positive perception towards the country`s economic fundamentals and future prospects. On the other hand in line with seasonal pattern current account deficit in the second quarter is expected to be higher than in the previous quarter. The country`s exports meanwhile remained pressured due to a weaker demand and the drop in the price of world commodities while imports including oil and gas would still increase. The country`s foreign exchange reserves until the end of May, 2013 reached US$105.1 billion which was equal for 5.8 month imports and payment of government foreign debts and above the international adequacy standard. The central bank`s board of governors on Thursday decided to raise the reference rate by 25 basis points from 5.75 percent to 6.0 percent after maintaining it for the past 16 months.