The central bank (Bank Indonesia/BI) expects an improved economy in the third quarter (Q3) this year, for several sectors. Improvement in domestic demand, especially household consumption, reflected by improvement in retails and durable goods sales. Robust building investment is expected to persist, in line with government spending. Non-building investment is expected to improve, especially in export commodity based industry, along with the high commodity prices. By sector, improvements, although remain weak, began to show in the Trade, Hotels and Restaurants (THR) sector. The manufacturing sector is also expected to improve, especially those related to export activities, such as other transport equipment, chemicals and pharmacy. The economic growth is expected to improve along with more expansive government spending and Bank Indonesia’s monetary policy easing. Consequently, BI maintains its prediction for 2017 national economic growth in the 5.0-5.4% range, accelerating in 2018 to 5.1-5.5%.
