Indonesia's manufacturing sector output is expected to grow a faster 7.9% in 2007, helped by higher consumption and lower interest rates, an Industry Department official said.
The government estimated manufacturing probably grew 5% in 2006, less than a 6% official forecast made at the start of last year, partly due to weak domestic demand and high interest rates. Manufacturing growth was 4.6% in 2005.
"We expect the manufacturing industry to grow around 7.9% this year. The driver will come from private consumption, government expenditure and the construction sector," the department’s secretary general, Agus Tjahajana Wirakusumah, told Reuters on Thursday (18/1/07).
"The benchmark interest rate (BI rate) is expected to fall. If lending rates fall, it will also help business operations as businesses depend on loans for their working capital and investments," he said.