Thursday, 24 April, 2008 | 17:02 WIB
TEMPO Interactive, Jakarta: Indonesia is considered still being able to endure the upheavals that have occurred in the global financial market.
The International Monetary Fund (IMF) has stated that the financial sector in Indonesia is still showing good performance.
Charles Collyns, Deputy Research Director at the IMF, said that the banking credit in the first quarter of 2008 still displayed fine performance.
This caused the economic sector to still be able to endure market upheavals.
“But next month we will update the projection for the Indonesian economy,” said Collyns at the Bank Indonesia (BI) office in Jakarta, yesterday (4/23).
He added that the recent economic delays in the United States, which had moved on to Europe, did not have further impact in Asia and other developing countries.
The reason for this is they do not depend much on the US economy.
However, growth in industry and exports will be slightly affected because market demands in the United States and Europe are decreasing.
The strong domestic demands in Asia, according to him, would support economic growth amidst the on-going upheavals.
For Indonesia, the IMF has forecast that this years' economic growth will still be at the level of 6.1 percent.
On the other hand, Asia will see a fall to 6.2 percent compared to the previous projection of 6.6 percent.
This decrease is a result of the reduced exports to the United States and Europe.
Asian countries will focus on high inflation rates resulting from the rising prices of world oil and commodities.
In addition, inflation expectations will still be high.
“So it is important for state administrations in Asia to maintain the inflation pressure,” he said.
Collyns also suggested that Asian countries should safeguard inflation pressure through restrictions on monetary sectors and carry out policy framework improvements.