Indonesia’s growth to come from domestic sources
28 November 2011
An Indonesian central bank official said the country`s economic growth in 2012 would no longer come from foreign but domestic sources.
"It is important now to take safety measures at home to anticipate the impact of uncertainty in 2012," Bank Indonesia`s director for economic research and monetary policy Perry Warjiyo said here on Saturday.
He said this year Indonesia could still rely on sources of growth from abroad through foreign capital inflows as the impact of the crisis was not yet significant.
"What needs to be done now is shifting sources of growth which are used to be from abroad to home to avoid the negative impact (of the crisis)," he said at a discussion on global economic crisis.
He said various international institutions had also started revising down their predictions of economic growth in 2011 following current economic crisis.
He referred among others to the World Bank that revised its prediction from 4.5 percent to 4.0 percent and even further to 3.7 percent.
China`s economy which was initially predicted to grow 9.0 percent had now been predicted to go down to around 8.0 percent.
"With the declining growth the world`s demand would also decrease so that exports would drop. This is what is to also be felt in Indonesia," he said.
Perry said if the crisis in Europe continued short-term foreign investors would withdraw their funds in the developing countries.
"In the past two months some of them have already started withdrawing their funds from developing countries. Indonesia must anticipate this tendency well," he said.