Consumption, exports could spur economic growth: Central Bank<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The central bank said on Thursday the economy could grow this
\nyear by 5 percent, slightly higher than the state budget's
\nprojection of 4.8 percent, on the back of an increase in private
\nconsumption and exports.<\/p>\n
Private consumption, which makes up some 70 percent of the
\ncountry's gross domestic product (GDP), is expected to grow by as
\nmuch as 5 percent, Bank Indonesia governor Burhanuddin Abdullah
\nsaid during the bank's presentation on the country's economic
\noutlook for 2004.<\/p>\n
\"Exports will increase as well this year, by between 2.5
\npercent and 3.5 percent (over last year),\" Burhanuddin said,
\nadding it was based on the assumption that the country could take
\nadvantage of the continued signs of global economic recovery.<\/p>\n
As for 2003, the central bank predicted the economy had
\nexpanded by 4 percent, before all the data has been thoroughly
\ncalculated.<\/p>\n
The optimistic outlook for this year was consistent with
\nrising confidence on the economy from analysts, which predicted
\nthe economy would fare better this year, thanks in part to a more
\nrobust consumption generated from the general elections -- as
\nparties are set to dole out trillions of rupiah as part of their
\nstrategy get the 143 million registered voters to vote for them.<\/p>\n
Besides, Burhanuddin said consumer demand would also be
\nspurred by the declining trend in the central bank's benchmark
\ninterest rate, which currently stands at an historic low of 8.24
\npercent, backed by a benign inflation and rupiah that has
\nremained a the same level against the extremely weak U.S. dollar.<\/p>\n
The trend should lead to cheaper borrowing costs which would
\neventually boost consumer spending. Burhanuddin reiterated the
\nbank's commitment to maintaining the trend, saying: \"The SBI rate
\nwas likely to fall further to around 8 percent in the first
\nquarter of the year.\"<\/p>\n
He added that the move was also important to help boost
\nproductive activities. But, also of equal importance, it would
\nease the burden of the government in servicing the interest
\npayment of its domestic bonds, most of their interest rates are
\ntied to the central bank's rate.<\/p>\n
Analysts however, say the projected economic growth next year
\nwould still be insufficient to resolve the country's unemployment
\nwoes.<\/p>\n
They say Indonesia's economy needs to expand by about 6
\npercent to 7 percent annually to cut unemployment in the country.
\nWith only 4 percent growth, about 1.2 million new workers each
\nyear will fail to find work, on top of the 40 million or so
\ncurrently without full-time employment.<\/p>\n
Elsewhere, Burhanuddin also forecast the rupiah to stay within
\na range of 8,200-8,700 per U.S. dollar this year, and a 5-6
\npercent range for inflation. The state budget targets the rupiah
\nto average 8,600 against the U.S. dollar, and an inflation of 6.5
\npercent.<\/p>\n
eyebox
\nRI GDP Growth Predictions (%)
\n--------------------------------------<\/p>\n
2003 2004
\n--------------------------------------
\nState Budget 4.0 4.8
\nBank Indonesia 4.0 5.0
\nADB 3.4 4.0
\nStanChart 3.8 4.3
\nBank Mandiri 3.9 4.2
\n--------------------------------------
\nSource: The Jakarta Post<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/consumption-exports-could-spur-economic-growth-central-bank-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}