WB: Indonesia's economic growth may slow to 4.4 pct in 2009
11/12/2008 15:28
The World Bank has forecast that Indonesia's economic growth may fall to
4.4 percent next year, as the global economic down-turn eases the country's
export and investment, a paper said in Jakarta today.
The figure is more
pessimistic than the central bank prediction of 4.5 percent, according to the
Jakartaglobe daily.
The global economic down-turn expected to tilt into a
recession next year would be felt the most at the first quarter next year, an
Indonesian official has said.
Exports of the Southeast Asia's largest economy
have started to slump since October as global financial crisis has sapped demand
and prices of palm oil, copper, coffee and iron, the main commodities exported
by Indonesia, the statistic agency has said. Crude palm oil is the country's
biggest export by value.
Indonesia's overseas sales weakened by 11.61 percent
to US$10.81 billion in October compared to those in September, it said.
The
country's central bank and the government predicted that this year's economy
would grow by 6 percent and flag the possibility of further slowing down.
The
bank sees that inflation will end at 6.5 to 7.5 percent next year. In November
the inflation rate slowed to 11.68 percent due to weakening of prices of energy
and food.
To face with the slowdown next year, the central bank on Dec. 4 cut
the rate by 25 basis points to boost activity in real sector. The government has
created new infrastructure projects and speed up implementing already planned
projects to provide more jobs.
Another step to boost purchasing power is
reducing oil prices. The government on Dec. 1 slashed subsidized-gasoline price
by 8.3 percent to 5,500 rupiah (some US$0.51) per litter following the falling
of the global oil price to below nearly 40 U. S. dollars a barrel after a record
high of about US$147 on July 11.
The government plans to make another cut on
oil price next year as the country heads to direct presidential and legislative
polls.
The government expects to use over US$5 billion standby loans secured
from Japan, Australia, the World Bank and the Asian Development Bank to plug
budget deficit of around 52.7 trillion rupiah (US$4.37 billion) in 2009,
following the country's plan to cut bond sales by a third due to the seeping of
investors appetite.
The World Bank further forecast that that Indonesia's
investment growth could be flat in 2009, before recovering to around 7 percent
in 2010.
Xinhua
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