G3 economies to slow down, import demand to drop<\/p>\n
Zakki P. Hakim, The Jakarta Post, Jakarta<\/p>\n
The economies of the United States, Europe and Japan are expected
\nto slow down this year, which will pose a modest threat to Asian
\nexporters including Indonesia, as the decelerating economies will
\nconsequently have less demand for imports, a leading economist
\nsays.<\/p>\n
BNP Paribas Chief Economist for Asia Pacific Andrew Freris
\nsaid the impact on Asian exporters would be relatively modest, as
\nbetween 30 percent and 45 percent of Asian trade was done with
\nfellow Asian countries outside Japan.<\/p>\n
Citing an example, he pointed out that a third of Indonesian
\nexports between 1998 and 2004 went to Singapore, South Korea,
\nChina, Malaysia, India, Thailand and the Philippines.<\/p>\n
As demand was about to drop, Freris forecast that global
\ncommodity prices would also go down and oil prices would be no
\nexception.<\/p>\n
\"We forecast that oil prices could go down as far as US$40 per
\nbarrel from the current average of $47 a barrel,\" he said in his
\npresentation, Global Financial Developments and the Implications
\nfor Asia and Indonesia, on Wednesday.<\/p>\n
The economist said the G3 economies -- the U.S., Europe and
\nJapan -- were to slow down in 2005 with Japan and Europe re-
\naccelerating in 2006.<\/p>\n
\"Interest rates in the U.S. are to continue to rise until year
\nend, while in Europe, rates are to stay flat until later this
\nyear. Interest rates in Japan will not increase until deflation
\nends,\" he predicted.<\/p>\n
Meanwhile, Freris said, the U.S. dollar was to weaken against
\nthe euro and yen, while all Asian currencies, including the
\nrupiah, were to strengthen against the dollar throughout the rest
\nof the year.<\/p>\n
He predicted that the rupiah could appreciate to Rp 9,000 to
\nthe U.S. dollar in the first quarter next year.<\/p>\n
He went on to say that the Chinese renminbi would not revalue
\nin 2005 but register only a widening of the trading bands.<\/p>\n
Moreover, he was optimistic that Indonesia could grow at over
\n9 percent by 2009, if the country could secure foreign direct
\ninvestment (FDI) of up 25 percent of the gross domestic product
\n(GDP), provide adequate infrastructure and maintain efficiency in
\nthe financial sector.<\/p>\n
He stressed that Indonesia needed FDI to build the
\nmanufacturing sector and boost domestic and foreign trade, in
\norder to accumulate enough foreign exchange reserves to lessen
\nthe country's foreign debt.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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