Central Java’s Economic Growth in 2018 is predicted to break 5.36%

Kabar24.com, SEMARANG-Central Java’s Economic growth is expected to resume its expansion last year.

The Economic improvement of Central Java’s International trading partners, is predicted to be one of the main stimulus. In February 2012, Regional Economic Review (RER) published by Bank Indonesia reported that Central Java’s economic growth will reach the range of 5.2% -5.6% year on year (yoy).

If it reaches its highest estimation, it will surpass 2017 gross domestic product (GDP) growth realization of 5.27%.

"Our prediction, the increase is quite significant. We are optimistic that Central Java can reach the average growth, or even possibly reaching the 5.36% or 5.37% range, "said Deputy Head of Central Java Bank Rahmat Dwisaputra, Thursday (8/3).

In addition Rahmat explained that export activities will still be the main support for the growth of this region. It is expected that the global economic recovery occuring in Central Java’s International trading partners will increase bussiness activities in the area.

As noticed, based on the data from Central Bureau of Statistics (BPS) in Central Java, countries such as the United States, European Union and Japan became the province's largest export destination last year. Exports to the US in 2017 reached US $ 1.53 billion, followed by EU with US $ 797.21 million and Japan with US $ 711.54 million. The total value of Cenral Java’s exports in the same period rose 11.2% from the previous year which was US $ 5.99 billion.

According to Rahmat, the government's full commitment in improving the ease of investment and business, and commitment in the completion of infrastructure development is expected to boost Central Java’s 2018 economic growth.

In addition, the agenda of governors election and regional head elections in 7 districts / cities in Central Java that took place simultaneously in the second quarter / 2018, is expected to encourage public consumption significantly. The relatively stable purchasing power is also expected to have an impact on the improvement of consumption performance.

Meanwhile, other sentiments are expected to emerge from central government policies that will cut the final PPh fee for micro, small and medium enterprises (MSMEs) from 1% to 0.5% by the end of this month.

Furthermore, when viewed from the Economic Census data held by Central Bureau of Statistics (BPS) in 2017, the number of SMEs in Central Java currently reaches 4.13 million. He also hopes, with significant economic growth and the emergence of some stimulus from the government, it will be followed by a decline in non-performing loans (NPL) of Central Java.

Separately, Head of the 3rd Regional Central Java - DIY Financial Services Authority (OJK) Bambang Kiswono said, from the side of banking and financial institutions perspective he is optimistic that Central Java will continue its positive record since last year.

Nevertheless, he does not see a series of regional heads electoral process affecting the performance of banks and financial institutions in the province. Although he did not dismiss the potential growth of credit distribution to the community during the campaign period.

"There is a possibility of increase in lending, but I think it is limited. Maybe for entrepreneurs campaign equipment such as screen printing shirts and billboards, but it does not seems significant, "said Bambang.