Thu, 19 Jan 2012
Jakarta (ANTARA News) - Bank Indonesia has estimated that foreign investment (PMA) in 2012 would continue to increase due to the improved investment climate in Indonesia which was marked by the increase in Indonesia`s rating to investment grade.

"We estimate it may reach 19.1 - 19.2 billion US dollars, higher than last year`s 18.7 billion US dollars," Deputy Governor of Bank Indonesia Halim Alamsyah said in Jakarta Thursday.

In the meantime foreign investment in portfolio like shares and bonds may decline from 5.8 billion US dollars to 3.7 billion US dollars, in relation to the worsening economic condition in Europe and risk factor relating to Indonesia`s condition which has not reached the AAA category.

"While already reaching an investment grade, at the portfolio foreign investors would not dare to come to Indonesia," Halim said.

Bank Indonesia Governor Darmin Nasution said that the growth of world economy would be lower than consumption in the advanced countries which would be stagnant and unemployment would be high.

This will effect the exports of developing countries, while the global financial market is still in a confusion with the continued crisis in Europe causing liquidity in the financial market to continue to remain tight with increasing risks.

In addition, the global financial market is also facing possible rating declines in a number of countries in Europe triggering negative sentiments.

with regard to prices, global inflation pressures have been declining along with declining international commodity prices.

Under such developments, in anticipation of the effects on the weakening global economy amidst the declining inflation, global monetary policy responses had been accommodating.

Domestically, Darmin believed Indonesia`s economy growth in 2011 had been quite firm in line with the well maintained macro-economic stability and financial system.

Economic growth in the fourth quarter of 2011 may reach 6.5 pct, with the support of the still strong household consumption and investment with exports still being maintained although rather sluggish. In the entire 2011, economic growth may still reach 6.5 pct, higher than the previous year`s 6.1 pct.

Production wise, the sectors which may function as the main boosters of economic growth are industry, transportation, communications, trade, hotels and restaurants. (*)



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