||Asean Affairs 3 July 2013
WORLD BANK LOWERS RI’S ECONOMIC GROWTH FORECAST
The World Bank (WB) revised its economic growth target for Indonesia to 5.9 percent from 6.2 percent as the weakening of domestic consumption and export lingers.
“There still will be fluctuations until the end of this year as the growth of domestic demand slows down and pressures toward commodity prices and export income continue,” said WB principal economist, Ndiame Diop, in Jakarta on Tuesday, as quoted by Antara news agency.
Ndiame said Indonesia should make adjustments to economic pressures, such as the slowdown of growth in the first quarter and quantitative easing withdrawal plans, to secure the macro economy stability.
“Maintaining a macro economy policy, which is flexible but can be predicted and communicated well, will be really helpful for Indonesia during this uncertain period,” said Ndame.
He added the slowdown of the economy prospects, which was followed by indications of the slowdown of investment growth and the decline of consumer trust due to the subsidized-fuel price hike, had led to a high rate of inflation in June.
“Recent corrections of the stock market have burdened domestic demand and caused the economy to slow down,” said Ndame.
However, he added, the increase of the price of subsidized-fuel would help to narrow the 2013 revised state budget deficit with a Rp 42 trillion (US$4.24 billion) saving projection. This would also push the increase of compensation expenditure for social aid programs, he went on.
“The compensation will help to reduce the poverty rate, expected to stand at 9.4 percent in March 2014,” said Ndame.