Bulletin of Monetary Economics and Banking

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This paper analyzes the economic condition of the second quarter of 2017 and provides the outlookfor 2017 and 2018. It covers the global dynamics and domestic in national level as well as spatial views inIndonesia. From external, global economic expansion continues, entailing a shift in the sources of growthwith China and Europe was expected to increase, while US economy grew slower than expected. At home,Indonesia’s economic growth was stable on the back of gain in investment particularly building investment.On the other hand, household consumption growth slowed, government consumption contracted afterspending was delayed, and exports posted slower growth. Spatially, the slowdown occurred in Java,Sulawesi and Kalimantan. CPI inflation was maintained within the target range despite increasing demandduring the lead up to national religious holidays. Balance of payments recorded a surplus while currentaccount deficit remains well maintained and financed by a large surplus in the capital and financial account..The rupiah rate moved steadily, with lower volatility relative to peer countries. The Banking industry waswell maintained and continued to strengthen financial system stability. The continued easing of monetarypolicy was responded by declining rates on deposits and loans. Moving forward, Bank Indonesia expectseconomic growth to accelerate in 2017, and grow higher in 2018 on the back of increased investmentand consumption in line with more expansive government spending along with space to ease monetarypolicy. On the other hand, inflationary pressures will be controlled in line with the lower inflation target.

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Creative Commons Attribution-NonCommercial 4.0 International License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License




Bank Indonesia