Citibank predicts GDP to grow by 4.8%
Citibank predicts GDP to grow by 4.8%
P.C. Naommy, The Jakarta Post, Jakarta
Citibank predicts the country's economy to grow by around 4.8
percent this year in line with the government's projection.
The bank's economist in Indonesia Anton Gunawan said that
domestic consumption would continue to become the main driver of
the economy, contributing around 70 percent to gross domestic
product.
Speaking at a seminar on the economy, Anton said that
household consumption would grow by 5.4 percent in 2004 from last
year's 4.7 percent.
He explained that the favorable macroeconomic climate
particularly the current declining trend in domestic interest
rate would help push consumer spending even higher.
Citibank predicts the Bank Indonesia benchmark interest rate
to continue to decline this year.
Anton added that the consumption growth would also be
supported by increasing trend of real wages in the manufacturing
and agriculture sectors, thanks to a relatively benign inflation
level.
But Anton said that investment would likely slowdown this year
among others due to the general elections.
According to data from the Investment Coordinating Board
(BKPM), approved domestic investment increased by 92.17 percent
from Rp 25.2 trillion in 2002 to Rp 48.5 trillion in 2003.
Approved foreign direct investment (FDI) has remained marginal
with an increase of only 34.83 percent from US$9,795.4 million in
2002 to $13.207 million in 2003. Some analysts have said that
the increase in the FDI figure was largely attributed to a switch
in existing domestic investment into foreign investment schemes
following acquisition moves.
Analysts have said that attracting more investments and
boosting exports are crucial for the country to be able to enjoy
a higher economic growth of between 6-7 percent, needed to create
enough jobs for the millions of unemployed people.
P.C. Naommy, The Jakarta Post, Jakarta
Citibank predicts the country's economy to grow by around 4.8
percent this year in line with the government's projection.
The bank's economist in Indonesia Anton Gunawan said that
domestic consumption would continue to become the main driver of
the economy, contributing around 70 percent to gross domestic
product.
Speaking at a seminar on the economy, Anton said that
household consumption would grow by 5.4 percent in 2004 from last
year's 4.7 percent.
He explained that the favorable macroeconomic climate
particularly the current declining trend in domestic interest
rate would help push consumer spending even higher.
Citibank predicts the Bank Indonesia benchmark interest rate
to continue to decline this year.
Anton added that the consumption growth would also be
supported by increasing trend of real wages in the manufacturing
and agriculture sectors, thanks to a relatively benign inflation
level.
But Anton said that investment would likely slowdown this year
among others due to the general elections.
According to data from the Investment Coordinating Board
(BKPM), approved domestic investment increased by 92.17 percent
from Rp 25.2 trillion in 2002 to Rp 48.5 trillion in 2003.
Approved foreign direct investment (FDI) has remained marginal
with an increase of only 34.83 percent from US$9,795.4 million in
2002 to $13.207 million in 2003. Some analysts have said that
the increase in the FDI figure was largely attributed to a switch
in existing domestic investment into foreign investment schemes
following acquisition moves.
Analysts have said that attracting more investments and
boosting exports are crucial for the country to be able to enjoy
a higher economic growth of between 6-7 percent, needed to create
enough jobs for the millions of unemployed people.