Aditya Suharmoko, The Jakarta Post, Jakarta
Investment is estimated to recover in the second and third quarters of this year, as indicated by the recent increases in capital inflows, Finance Minister Sri Mulyani Indrawati said Monday.
"Investment, which in the first quarter only rose 3.5 percent, is estimated to recover in the second and third quarters," she said. "Government investment in form of capital spending has also begun to materialize in the second and third quarters."
She also said the recent cuts of central bank's benchmark interest rate would prompt banks to cut lending rates, and made loans rolled again, contributing to the real sector.
Overall, the economy will still expand close to 4 percent in the second and third quarters, as investment rises and private consumption remains strong due to spending for education in July and ahead of the fasting month in September.
The economy grew by 4.4 percent in the first quarter of 2009 from a year earlier, according to the Central Statistics Agency (BPS).