Wed, 13 Jan 2010
Jakarta (ANTARA News) - The Indonesian Chamber of Commerce and Industry (Kadin) predicts Indonesia`s foreign trade will continue to see a deficit in its contribution to national economic growth in 2010.

"Exports will indeed move up but imports will be corrected so our foreign trade will eventually see deficit," Kadin`s head of economic assessment, research and development (LP3E), Faisal Basri, said here on Tuesday.

From the expenditure point of view, he said, exports would indeed be a contributor to the country`s economic growth, but the growth of imports would at the same time be corrected to greater extent so that foreign trade would not contribute anything to economic growth.

Kadin`s projection of export growth has been raised from 6.4 percent to 7.2 percent, he said.

Based on data from the Central Bureau of Statistics and Kadin`s LP3E the tourism and trade sectors in 2008 contributed 7.2 percent to the country`s economic growth while in 2009 the sectors grew minus 0.16 percent.

So, the trade growth projected to reach 7.2 percent in 2010 would be offset by minus growth in 2009, he said.

In view of other expenditures, Faisal said investment would become the biggest contributor to economic growth. He said investment was predicted to grow 8.6 percent or one percent higher than what Kadin had assumed in its road map.

He said the optimism was based upon four factors, namely banking credits which are expected to grow higher at around 20 percent, increasing flow of foreign direct investments, improvement in the quality of government capital spendings and acceleration of infrastructure projects.

On the other side consumption of private parties would also help contribute to the national economic growth, he said.

Kadin has raised the ceiling of private consumption from five percent to 5.3 percent.
The public consumption, he said, would be dominant in the Gross Domestic Product reaching around 60 percent. Therefore an increase of only 0.3 percent in the public consumption would be able to increase GDP nominally by 0.2 percent.(*)



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