ID :
11921
Wed, 07/09/2008 - 01:58
Auther :
Shortlink :
http://m.oananews.org//node/11921
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FINANCE MINISTER: 2009 ECONOMIC GROWTH TARGET LIKELY TO BE REVISED
Jakarta, July 8 (ANTARA) - Finance Minister Sri Mulyani indicated that the country's economic growth target in 2009 which has been lowered from 6.2 to 6.4 percent will be revised due to a high downside risk.
"But we have to look at all aspects. The momentum for ecnomic growth at the six-percent growth level must be preserved so that it it can be achieved," the minister said here on Tuesday.
She also said the downside risk will emerge as a result of inflationary pressures, especially in the non-food sector which is sensitive to fuel oil price hikes.
"We have to exercise more caution on this," she said.
Last year the World Bank in its report said that Indonesia's economy was likely to gather steam next year if the government implemented infrastructure and investment reforms, but unemployment and the slow response to bird flu could hurt growth.
A World Bank report said Southeast Asia's largest economy was on course to grow 5.5 percent this year as public spending is expected to pick up and interest rates are likely to fall, and may grow 6.2 percent next year and 7 percent in 2009.
"Failure to deliver on policy promises, on the other hand, will result in growing cynicism among investors, reduced growth prospects and poor employment and poverty outcomes," said the report.
Economic growth in Indonesia has slowed since the government sharply increased fuel prices last May and also jacked up interest rates to curb inflation, crimping consumption in the country of 220 million people.
In the meantime, Vice President Yusuf Kalla earlier said that Indonesia still enjoyed an economic growth of 6.3 percent last year. "I am sure if we can put those four major problems to rest, we will see economic growth rise to 9 or 10 percent in 2011."Asked why he was optimistic about economic growht, Kalla said the competitiveness of Indonesian products was expected to increase within the next three years, like the cheap products from China which currently dominate global markets.
"India will cease being competitive because of rising fuel costs for transportation from these two countries to, for instance, the United States, one of their largest trading partners. U.S. consumers might then turn to cheaper products from neighboring Mexico. So China and India will have to focus on their domestic markets," he said.
"But we have to look at all aspects. The momentum for ecnomic growth at the six-percent growth level must be preserved so that it it can be achieved," the minister said here on Tuesday.
She also said the downside risk will emerge as a result of inflationary pressures, especially in the non-food sector which is sensitive to fuel oil price hikes.
"We have to exercise more caution on this," she said.
Last year the World Bank in its report said that Indonesia's economy was likely to gather steam next year if the government implemented infrastructure and investment reforms, but unemployment and the slow response to bird flu could hurt growth.
A World Bank report said Southeast Asia's largest economy was on course to grow 5.5 percent this year as public spending is expected to pick up and interest rates are likely to fall, and may grow 6.2 percent next year and 7 percent in 2009.
"Failure to deliver on policy promises, on the other hand, will result in growing cynicism among investors, reduced growth prospects and poor employment and poverty outcomes," said the report.
Economic growth in Indonesia has slowed since the government sharply increased fuel prices last May and also jacked up interest rates to curb inflation, crimping consumption in the country of 220 million people.
In the meantime, Vice President Yusuf Kalla earlier said that Indonesia still enjoyed an economic growth of 6.3 percent last year. "I am sure if we can put those four major problems to rest, we will see economic growth rise to 9 or 10 percent in 2011."Asked why he was optimistic about economic growht, Kalla said the competitiveness of Indonesian products was expected to increase within the next three years, like the cheap products from China which currently dominate global markets.
"India will cease being competitive because of rising fuel costs for transportation from these two countries to, for instance, the United States, one of their largest trading partners. U.S. consumers might then turn to cheaper products from neighboring Mexico. So China and India will have to focus on their domestic markets," he said.
