RI economy not much affected by european crisis : analyst

Jakarta  (ANTARA News) - Indonesia`s economy is currently in stable condition and not too much affected by the impact of the financial crisis in Europe, an analyst said.

"The Indonesian economy is not very much affected because it is still supported by a large domestic market with the non-tradeable sector serving as the engineer," economic analyst Telisa Felianty said in a presentation here Tuesday.

Telisa said growth of labor productivity in Indonesia was increasing, the demographic bonus was also helping the economy to remain safe.

Besides the economy was also being supported by the limited exports of Indonesian goods to Europe so that the crisis there did not have a direct effect on Indonesia.

"The share of Indonesian exports in the Eurozone is only 10 percent because Europe is not a major destination for Indonesian exports. Indonesians should not be pessimistic because of the financial crisis in Europe," Telisa said.

But she also said Indonesia`s exports could be influenced by the crisis if China as one of Indonesia`s major trading partners was directly affected by the European financial crisis.

However, Telisa estimated that the financial markets could be directly affected by the crisis because of the interaction mechanism based on the global markets could affect domestic transactions as a whole.

"This could pose an immediate impact because the crisis can make investors to remove their foreign capital portfolio ownership in developing countries such as Indonesia," she said.

Telisa suggested that Indonesia maintained and enhance the momentum of economic growth, implementing regulatory and supervision, strengthen early warning systems, improve discipline and increase the fiscal space to maintain the fundamental as well as finding export market opportunities.

Inter-connectivity development acceleration is also required to connect Indonesian islands and reduce the high costs, maintain exports and protect domestic markets and also anticipate the immediate impact of increasingly rapid imports.

"Therefore, the growth based on `endogenous growth` needs to be maintained and enhanced," she said. (*)

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