Boediono expects recovery in investment in 2004
Boediono expects recovery in investment in 2004
The Jakarta Post, Jakarta
Minister of Finance Boediono said on Friday that investment
activities in the country would improve significantly after the
2004 general election had been completed and a new administration
is in place.
He said that many investors had delayed their investment plans
due to the uncertainty before the general election.
"I think there will be a strong recovery in investment after
the completion of the general election," he told reporters.
But he was still optimistic that the 4 percent economic growth
target for this year could still be achieved driven by domestic
consumption and recovery in exports.
He expected that the recent increase in the salary of
government employees and strong growth in the agriculture sector
could push up domestic consumption, which has been the primary
source of economic growth in the past couple of years.
The World Bank said earlier on Thursday in its updated
economic outlook for Asia, that Indonesia's economy would be
negatively affected by the current outbreak of Severe Acute
Respiratory Syndrome (SARS) and the recent war in Iraq.
The Bank maintained its 3.3 percent economic growth projection
for Indonesia this year.
It said that positive developments in the macroeconomic
indicators such as stronger exchange rate of the rupiah against
the U.S. dollar, lower inflation and lower interest rates had not
translated into increased investment.
Analysts have said that the weak world economy, aggravated by
SARS and the effects of the Iraq war, would also affect the
country's exports this year.
The central bank said in a recent report that exports during
the first quarter of this year were expected to grow slightly.
It said that first quarter economic growth was expected to
slow to 3.2 percent from 3.8 percent in the previous quarter as
domestic consumption was also weakening.
Indonesia's economy has to grow by at least 5 percent to help
ease the huge unemployment problem.