JAKARTA. Indonesia’s economy throughout the first three months of this year will grow flat compared to the same period last year of 5.01%. The government’s version of the first quarter 2018 economic growth target of 5.2% is likely to fail. Some growth engines have not worked optimally.
Even though in fact, during January of March there were many positive achievements. Tax revenues up to the performance of non-oil exports recorded growth.
Tax revenues in the first quarter of 2018 grew 16.21% compared to the same period in 2017. From the business sector, tax revenues also showed double digit growth, especially in the processing and trading sectors, which were 16.72% and 28.64% respectively.
So is the export performance. Cumulatively, the Central Statistics Agency (BPS) noted, the value of Indonesia’s exports in January March 2018 reached US $ 44.27 billion, an increase of 8.78% compared to the same period of 2017. From that amount, our country’s non-oil and gas exports amounted to US $ 40, 21 billion or up 9.53%.
Calculation of Bank Indonesia (BI), our country’s economic growth in the first quarter of 2018 was 5.11%. Exports and investments are the drivers of economic growth. While the household expenditure group is still growing below the average.
Lana Soelistianingsih, Economist at Samuel Aset Manajemen, calculates that our economy during the first quarter of 2018 will grow 5.06% to 5.09%. Household consumption is still growing slowly, so that economic growth is difficult to exceed 5.1%. “Household consumption contributes 56% to GDP where 60% is still from retail,” he told Kontan.co.id on Sunday (29/4).
If you look at retail sales in the first quarter of this year, Lana says, it’s no better than last year. There is a slowdown in the conventional retail sector. “It can be seen, the data of issuers related to consumer goods in the first quarter of 2018 are not as good as 2017,” Lana said.
While the growth of tax revenues, Lana analyzed, has not reflected an increase in economic activity. The tax revenue growth is the impact of increased compliance after the Tax Amnesty Program. “It doesn’t always reflect the improvement of his business,” he said.
Indeed, the absorption of government spending increases. But, it has no significant effect on the national economy. The contribution of government spending is only 8% of GDP. “Exports also rose but imports grew positively, which eroded net exports,” Lana explained.
The Center of Reform on Economics (Core) Indonesia also predicts that Indonesia’s economic growth in the first quarter of 2018 will be held at the level of 5%. CORE Indonesia Executive Director Mohammad Faisal said the domestic economy was stagnant due to consumption of households that had not yet recovered properly.
One of the indicators: retail sales growth during January to February 2018 which was minus 0.38%. While in the same period 2017 still grew by 5.03%.
The upper middle class also tends to still hold back spending. Motor vehicle sales indicators show, car sales actually weakened, from growing 6.15% in the first quarter of 2017 to only grow 2.88% in the first quarter of 2018.
Expect fasting month
Similarly, although he did not mention the numbers, Aldian Taloputra, Chief Economist of Standard Chartered Bank Indonesia, estimated that economic growth in the first quarter of 1820 would be relatively flat compared to the previous quarter. The new economic rate will increase significantly starting in the second quarter of 2018, along with the increase in consumer purchasing power in the fasting month and Eid.
Coordinating Minister for Economic Affairs Darmin Nasution also mentioned that economic growth in the first quarter of 2018 had the potential to be lower than in the same period of 2017. “Maybe this year’s first quarter growth cannot be higher than last year. However, we don’t expect that. I’m just saying, maybe it’s not higher than last year, “Darmin said.
Unlike the others, Enrico Tanuwidjaja, UOB Indonesia’s Head of Economics & Research Finance and Corporate Service, is more optimistic. He predicts that our economic growth in the first quarter of 2018 will reach 5.2%. That is in line with Indonesia’s economic fundamentals which are still strong in terms of investment and development.
In fact, the strong fundamentals will last until the second quarter of 2018. Enrico’s projection, during the April-June 2018 period, the economy could grow even higher at 5.3%. The momentum of the fasting month, Eid al-Fitr, and simultaneous regional elections (pilkada) are the drivers. “In that period, public consumption will increase quite high,” Enrico explained.
Throughout 2018, Enrico was convinced that the domestic economy could grow in the range of 5.3%. The strength of Indonesia’s economic fundamentals is supported by private consumption, growth in investment spending, and increasing sustainable export performance.