REPUBLIKA.CO.ID, JAKARTA -- The Deposit Insurance Agency (LPS) projects gross domestic product (GDP) of Indonesia in 2015 will grow 5.0 percent, lower than the previous estimation in 5.3 percent. LPS also lowers its economic growth in 2016 from 5.6 percent to 5.5 percent.

LPS Secretary, Samsu Adi Nugroho said the revised economic growth projection was done mainly because of the realization of the growth in the first quarter was well below expectations. Government spending and credit growth were still slow in the second quarter also explained cuts the forecast of GDP growth 2015.

The balance of economic growth risks in the future, said Adi, tend to be neutral. "The reversal of the direction of government spending and credit growth may be upside risk which supported the growth in the second half," said Adi.

The improvement of Indonesia's trade balance which was continuing also became upside risk for future economic growth. Instead, Adi explained that downside risk came from the depreciation of the rupiah exchange rate and inflation would still be relatively high for most of 2015.

In the second quarter 2015 this number of global economic institutions revised the economic growth in Indonesia. The World Bank Indonesia cut its growth target from 5.2 percent to 4.7 percent this year. International Monetary Fund (IMF) has the same prediction.

The Asian Development Bank (ADB) also corrected the Indonesian growth from 5.5 percent to 5.0 percent in 2015. Meanwhile, Bank Indonesia (BI) determined growth at 5.1 percent and the government lowered growth target of 5.7 percent to 5,4 percent.

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