REPUBLIKA.CO.ID, PALEMBANG -- Palm oil price hike since early this year has boosted South Sumatra's economic growth, Bank Indonesia has said. 

Head of the advisory and economic development division of the central bank's representative office for South Sumatra Hari Widodo predicted palm oil price increase would continue through the second quarter of 2017. 

Investment and household consumption remain the drivers for South Sumatra's economic growth this year, Hari said here on Friday, adding, household consumption would depend on the commodity prices, including palm oil price. 

Bank Indonesia has predicted the economy of South Sumatra would grow 5.1 percent - 5.5 percent this year after a 5.03 percent growth last year, Hari said.

South Sumatra's production of palm oil is predicted to reach 3.4 million tons in 2017 , up 400,000 tons from last year. 

Also read: South Sumatra hopes to produce 3.4 million tons of CPO

With the production , South Sumatra would maintain its 10 percent contribution to the country's total production of crude palm oil (CPO), chairman of the South Sumatra branch of Indonesian association of palm oil companies (Gapki) Harry Hartanto said here on Friday. 

"Gapki has set a higher target this year on expansion of oil palm plantations and favorable climate ," Harry said.

He predicted this year there would be no El Nino, the weather phenomenon, that would cause long drought and poor harvest.

Based on data from the Central Bureau of Statistics, CPO exports of the province were valued at US$48.86 million in February this year up from US$36.22 million in the same period last year.

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