"In turn, it will give pressure on the rupiah exchange rate."
Jakarta (ANTARA News) - Bank Indonesia has seen three main challenges facing the country`s economy in 2013 despite optimism over its good prospects so far.

"The first is risk from the uncertainty of global economic recovery and commodity prices that could disrupt Indonesia`s exports," the central bank governor, Darmin Nasution, said at a meeting with the House of Representatives here on Monday.

He said under the conditions continued strong domestic demand could increase pressure on the current account.

The second challenge meanwhile is increasing consumption of oil fuels in the midst of declining production, he said.

"This will encourage more oil imports and widen the current account deficit," he added.

Darmin said increasing consumption of oil fuels could also increase the subsidy burden in the national budget that could cause negative perception on fiscal sustainability.

"In turn, it will give pressure on the rupiah exchange rate," he said.

Darmin said the third challenge was high dependency on imports of capital goods and raw materials.

"The imports dependency could cause pressure on the current account when investment activities keep rising," he said.

Editor: Priyambodo RH
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