Household consumption - the main engine of Indonesia\u2019s economy - needs to grow at about 3.5 percent this year to compensate for negative growth of non-oil and gas exports and slowing investment, a official from the National Development Planning Board, or Bappenas said.<\/p>\n
Bambang Priambodo, director of macro economics planning at Bappenas, said such a level of household consumption growth was vital if Indonesia wanted to achieve about 4 percent economic growth.<\/p>\n
\u201cAs we all know, projections for the world\u2019s economic growth in January are worse than the previous prediction,\u201d Bambang said.<\/p>\n
In Bappenas\u2019 latest forecast, it predicted non-oil and gas exports would fall 20 percent this year on a gloomier world economic outlook. The agency also forecast investment to grow at only 5 percent due to tight liquidity in the financial sector, hampering private expansion.<\/p>\n
Bambang had said last year that the agency was still optimistic that Indonesia could grow at between 4.5 percent and 5 percent, but as the latest reading of the world\u2019s economy revealed worse-than-expected results in January, he said \u201c4 percent growth [for Indonesia in 2009] would be good enough, compared to other countries that may experience a contraction.\u201d<\/p>\n
But, he added, that level would depend on how fast the government\u2019s Rp 73.3 trillion ($6.2 billion) fiscal stimulus package could be delivered, and in turn have a domino effect to help boost household consumption and compensate for slowing exports.<\/p>\n
\u201cBy October we should be able to see how it goes,\u201d Bambang said, adding that 5 percent investment growth would be supported mainly from government spending on infrastructure.<\/p>\n
Household consumption - which is given a 61 percent weighting in GDP calculations \u2013 grew at 5.3 percent in 2008 from a year earlier. It helped Indonesia\u2019s economy grow 6.1 percent in 2008.<\/p>\n
Exports of non-oil and gas commodities \u2013 which comprised 78.8 percent of total exports - were recorded at $107.8 billion last year, up 17.2 percent from a year earlier, the Central Bureau of Statistics, or BPS, data showed.<\/p>\n
Exports slowed as major overseas buyers of the country\u2019s commodities and manufactured goods - including the United States, European nations and Japan - reduced their spending due to the global slump.<\/p>\n
Meanwhile, Indonesia\u2019s gross capital formation, or physical investment recorded by BPS in the country, was reported at Rp 1,369 trillion ($116.4 billion) in 2008, growing at a rate of 11.7 percent from a year earlier.<\/p>\n
The International Monetary Fund projects global growth of 0.5 percent in 2009, according to its World Economic Outlook report in January. In October, it forecast global growth of 2.2 percent.<\/p>\n
The WEO\u2019s January prediction estimated US economic growth of minus 1.6 percent.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/muhamad-al-azhari-consumer-spending-needed-to-offset-decline-in-exports-1237798719", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }