"Besides, private and government investments will cover the shortfall from declining exports."
Jakarta (ANTARA News) - The Asian Development Bank (ADB) has cut its economic growth forecast for Indonesia from 6.4 percent to 6.3 percent this year, in view of the economic slowdown in Asia.

"Due to the impact of global economic conditions and the Asian economic slowdown, the Indonesian economy is expected to grow at a slightly slower pace," ADB senior economist Edimon Ginting said here on Wednesday.

"There is a decline in exports because the European crisis is showing no signs of abating. However, investment will increase thanks to the conducive business climate in Indonesia," he added.

"Besides, private and government investments will cover the shortfall from declining exports," Edimon stated.

"Investment will continue to grow until 2013 as the business community`s confidence in the domestic economy remains high," he said.

"The last survey made by UNCTAC (the United Nations Conference on Trade and Development) shows improvement in foreign investors` perception of Indonesia. As an FDI destination, Indonesia`s rank has improved from the sixth spot to the fourth spot next only to China, the United States and India," Edimon pointed out.

He said although the country`s current account deficit had widened, accounting for 2.1 percent of the gross domestic product, the Indonesian economy was "not necessarily overheating".

"The deficit is very much influenced by a decline in export commodity prices," Edimon stated.

"The rupiah, which has lost 5 percent against the dollar since early this year, will boost export performance and reduce the import of consumer goods. Therefore, we predict that the current account deficit will narrow in 2013," he said.

Edimon also added that the high economic growth in Indonesia led to a reduction in poverty rate, to 12 percent, as 4 million jobs were created and 2.5 million workers employed in the informal sector moved to the formal sector.
(Uu.S012/INE/KR-BSR/B003)

Editor: Priyambodo RH
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