Indonesia's economy to grow as targeted despite bombing: IMF<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
Indonesia's economy can still grow by 3.5 to 4 percent this year
\nin line with the initial projection, despite having to weather
\nthe impact of the JW Marriott Hotel bombing, Asia Pacific senior
\nadvisor Daniel Citrin of the International Monetary Fund said on
\nMonday.<\/p>\n
\"We still think that growth within the range of 3.5 to 4.0
\npercent this year, which is the government target, is achievable.
\nIt is still early to say, but we still think it is achievable,\"
\nCitrin told reporters.<\/p>\n
Citrin is currently leading an IMF team to review the
\ncountry's latest economic program, which could lead to another
\nloan tranche disbursement of US$480 million -- one of the IMF's
\nlast two disbursements before the existing $5 billion assistance
\nprogram ends this year.<\/p>\n
Citrin did not explain the reasons behind his upbeat
\nappraisal, but he was the latest to have voiced support for
\nIndonesia's economic resilience, despite a series of internal and
\nexternal shocks over the last few years.<\/p>\n
Previously, analysts stressed that the latest terrorist attack
\ncould weaken investor confidence in the economy, but not to a
\nlevel that would prompt capital flight.<\/p>\n
This means the economic impact of the attack would likely be
\nlimited to certain sectors only, such as tourism and travel, and
\nthat it would not inflict any permanent damage on the economy.
\nThus, the economy would be able to expand as targeted initially.<\/p>\n
Government officials and several economists pointed out the
\nrelatively quick recovery of the rupiah and the stock market as
\nproof that investors were still confident about prospects here.<\/p>\n
On Aug. 5, when a terrorist bomb exploded at the Marriott, the
\nrupiah and stock index tumbled on panic selling with fears of
\ncapital outflows looming large.<\/p>\n
The attack on the Marriott killed 11 and injured 148 others.<\/p>\n
Nerves eventually subsided the following day, with both the
\nrupiah and stock index -- crucial indicators to measure market
\nsentiment on the economy -- regained most of the lost ground and
\nbegan to recover.<\/p>\n
On Monday, the rupiah closed at 8,540 per dollar, up from its
\nclose at 8,565 on Friday, which marked a rally for the fourth
\ntrading day since the attack. The stock index, however, was down
\n0.1 percent on profit taking, ending the day at 504.84 points.<\/p>\n
The Central Statistics Agency (BPS) reported that the economy
\ngrew in the first quarter by 3.43 percent, with analysts
\npredicting it would start to pick up in the second and third
\nquarters, regardless of the bombing.<\/p>\n
The IMF's optimistic remarks should provide further comfort
\nfor investors and market players in doing business here in the
\ncountry, as its appraisal usually becomes the benchmark upon
\nwhich other international economic institutions base their own
\nassessments.<\/p>\n
Citrin also concurred with a projection by the central bank on
\ninflation, that a full-year inflation of around 6 to 7 percent
\nwas feasible, below the initial estimate of 8 to 9 percent.<\/p>\n
The BPS reported recently that the relatively stable prices of
\nconsumer goods, some of which had even posted a decline, had
\neased pressure on the inflation rate, with accumulated inflation
\nover the first seven months coming in at 1.29 percent, the lowest
\nin 20 years.<\/p>",
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