Global economic conditions worsening: finance minister

Jakarta (ANTARA News) - Finance Minister Agus Martowardojo said global economic conditions were worsening and therefore Indonesia should be on its guard.

"Global economic conditions are now worse than three weeks ago," he said at a coordination meeting on the 2012 budget bill here on Monday.

He said his assessment was based on the results of a meeting of G20 countries last week.

He said it was said at the meeting, projections of the world`s economic growth had been revised down down from 4.4 percent to 4.0 percent with growth in the developed countries estimated at around 1.5 percent and in developing countries at around six percent.

"It is even possible the world`s economy will only grow one percent or be corrected from four percent," he said.

Therefore, he said, there were five signals that should be watched closely.

Firstly, he said, it was risk intensification in Europe. He said "intensification will be rife in view of fiscal, banking and liquidity management while politically European countries must be united in agreeing on the bailout programs."

Secondly, he said, it was the economic slowdown in the US which was caused by a slowdown in the payment of public debt, household debt, fiscal and mortgage obligations and the yet-to--be completed housing policy.

The third signal was the global shock as a result of the indebtedness of some European countries such as Greece, Italy and Spain.

Agus said the next signal was the threat economic overheating in developing countries while the fifth signal was economic risks in Middle Eastern countries. (*)