2005 growth could be as low as 5.2%, Miranda says<\/p>\n
Urip Hudiono, The Jakarta Post, Jakarta<\/p>\n
Indonesia's economy will likely wrap up the year with growth of
\nonly between 5.2 percent and 5.6 percent, the central bank says,
\nas it continues to slow due to inflation that is set to remain
\nhigh at 16 percent until the year's end.<\/p>\n
\"We expected the economy would grow higher than last year, as
\neconomic activity would still increase over this year's two
\nremaining months, but it will be lower than we had previously
\nestimated,\" Bank Indonesia (BI) deputy governor Miranda S. Gultom
\nsaid at a seminar on Thursday.<\/p>\n
Indonesia's gross domestic product (GDP) grew by 5.13 percent
\nto Rp 2,303 trillion (some US$230 billion) last year, and had
\nbeen targeted to further expand by 6 percent this year.<\/p>\n
The economy has expanded at a slower rate in the last three
\nquarters, with rising inflation and interest rates after fuel
\nprice hikes in March -- even before the sharp increase of Oct. 1
\n-- dampening consumption. GDP only grew by 5.34 percent on year
\nto Rp 2,012 trillion during the third quarter, lower than the
\n5.84 percent and 6.12 percent during the second and first
\nquarters, respectively.<\/p>\n
This has prompted several officials to revise their forecasts,
\nincluding the finance minister.<\/p>\n
Separately, Minister of Finance Jusuf Anwar said that the
\neconomy would only grow by between 5.5 percent and 5.8 percent
\nthis year.<\/p>\n
The government is expecting economic growth of 6.2 percent for
\n2006.<\/p>\n
Miranda said reaching 6.2 percent economic growth for next
\nyear was possible, but that it would require extra efforts from
\nthe government, especially in improving Indonesia's exports and
\ninvestment climate.<\/p>\n
\"The world's trade sector has actually grown by 7 percent to
\n7.4 percent this year, so if we can tap into this trend, we can
\nexpect higher growth next year,\" she said. \"The government must
\nalso realize more of its programs and project loans, which this
\nyear only saw half of it being used.\"<\/p>\n
Meanwhile, on the inflation rate, the central bank expects
\nthis year's inflation rate to remain high at between 15 percent
\nand 17 percent.<\/p>\n
\"This year's inflationary pressure will be higher than we had
\nexpected. We expected inflation to reach 16 percent plus-minus 1
\npercent,\" Miranda said.<\/p>\n
The central bank, however, expects inflation to ease to single
\ndigits by next year's fourth quarter.<\/p>\n
\"We predict inflation of 8 percent or 9 percent by the end of
\n2006, after staying in double digits until the third quarter of
\nthis year,\" Miranda said.<\/p>\n
Elsewhere, Standard Chartered economist Fauzi Ichsan saw
\nIndonesia's economy expanding by 5.5 percent for both this year
\nand next year.<\/p>\n
\"The key to this, however, is more government spending to spur
\nthe economy, as well as more foreign direct investment,\" he said,
\nexplaining that GDP growth would remain sluggish until next
\nyear's first semester, before pacing up on more spending.<\/p>\n
In line with BI, by next year Fauzi foresaw inflation easing
\nto 8 percent and the rupiah at Rp 9,500 to the dollar on the back
\nof better macroeconomic stability.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/2005-growth-could-be-as-low-as-52-miranda-says-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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