RI to achieve growth targets despite worsening crisis

RI to achieve growth targets despite worsening crisis

(ANTARA/Ismar Patrizki)

Jakarta (ANTARA News) - Although the world economic crisis and recession are deepening at an increasingly worrying pace, Indonesia will still be able to achieve its economic growth targets in 2011 and 2012, a legislator said.

"Indonesia still has domestic driven sources to achieve its economic targets. Besides its domestic-driven economy, Indonesia`s domestic consumption, investment and effective fiscal policy will also drive Indonesia`s economy to achieve its growth targets," Kemal Aziz Stamboel of Commission XI of the House of Representatives (DPR) said here on Monday.

In the 2011 and 2012 state budgets economic growth was respectively set at 6.5 percent and 6.7 percent.

For this, he said, government expenditures had important role to play and so had investment which should be increased. It is important for the government to realize its expenditures in the infrastructure sector and to improve the investment and business climates.

The Asian Development Bank (ADB) has projected Indonesia`s economic growth at 6.6 percent in 2011 or higher than the World Bank`s projection of 6.4 percent.

The ADB also predicted Indonesia`s economic growth at 6.3 percent in 2012 if the European crisis continued to worsen. This projection rate is similar to that of the World Bank which also put its prediction of Indonesia`s economic growth in 2012 at 6.3 percent.

"This projection is based on a number of assumptions from worsening global crisis which is believed to have impact on Indonesia, such as the slowing down of exports and the tightening of the liquidity sector," the legislator said.

So, he said, if these problems could be anticipated as early as possible with proper polices, the projections could be on the other way around.

"Therefore, the government should design its policy to encourage exports with diversified markets and product innovation, boost investment and maintain the stability of the liquidity sector," he said.