BI optimistic nat`l economy to remain strong in 2012

BI optimistic nat`l economy to remain strong in 2012

(ANTARA/Rosa Panggabean)

Jakarta (ANTARA News) - Bank Indonesia (BI or the central bank) is optimistic the national economy will remain strong in 2012 despite economic uncertainties caused by current global economic crisis.

The central bank`s director of the Directorate of Economic Research and Monetary Policy, Perry Warjiyo, said in a seminar here on Tuesday "Bank Indonesia views Indonesia`s economic growth would remain strong despite strong worries over the world`s economic prospects."

In 2011 the country`s economy is projected to grow 6.5 percent and 6.6 percent in the fourth quarter. Meanwhile in 2012 it is expected to grow between 6.3 and 6.7 percent.

He said Indonesia`s economic resilience is related to the country`s economic structure marked by strong domestic demand especially household demand that minimizes the impact of global economic slowdown.

Perry said this year household consumption is projected to grow 4.8 percent while in 2012 4.6 to 5.1 percent.

With regard to the trade sector he said national exports would remain strong as dependency on Europe and the US has dropped much since ten years ago.

"The impact of global economic crisis indeed does exist but we are now stronger because around 20 percent of the country`s exports go to the Asean region while 16 percent to China, 12 percent to Japan and six percent to India," he said.

Perry said Indonesia`s export commodities meanwhile are also dominated by primary goods such as oil and gas, coal and mining products as well as forestry products which are not affected much by the global economic crisis.

With regard to the financial sector he said that although the impact has been seen in the past two months it still has not reduced investment interest both direct or portfolio investment as the yields remain high while the risks are low.

He said several policies that have been taken by the bank and the government have also successfully prevented the impact of the global crisis from going deeper in the sector including intervention in the rupiah currency market and government bonds.

"That is our main policies to maintaining the performance of bond market to be better," he said.

In the future, he said Indonesia needs to increase its economic resilience and also efficiency and economic competitiveness especially to increase the benefit of the country`s economic growth for the people such as empowering the real sector.

Economic observer Anton Hermanto Gunawan on the occasion meanwhile said the impact of the current global crisis would be smaller compared to that of 2009 but it would last longer because the crisis problems are mostly in Europe.

"The impact of the crisis this time will not be deeper than in 2009 but it will be longer," he said.

Anton therefore believed Indonesia would soon get an investment grade.