"Indonesia`s economy is well positioned to maintain resilience..."
Jakarta (ANTARA News) - The Asian Development Bank (ADB) has launched an economy outlook 2013 predicting that robust investment and private consumption will boost Indonesia`s economy growth in 2013.

ADB Country Director for Indonesia Jon D Lindborg said at a press conference on Asian economic outlook 2013 and Asia`s energy challenge here on Tuesday that the Indonesian economy will pick up to 6.4 percent in 2013, underpinned by robust private consumption and improving investment performance.

"Indonesia`s economy is well positioned to maintain resilience and even achieve higher growth rate this year and will accelerate to 6.6 percent in 2014," he said.

According to the ADB`s forecast, the private consumption will quicken in 2013, fueled by rising employment, an increase in average minimum wages and rise in public service wages.

Meanwhile, the investment, both private and public, are predicted to maintain healthy expansion thanks to support from the upgrades in sovereign credit ratings that had grown to 30 percent until January 2013, lower interest rates, increased budget allocations for infrastructure, and a lengthening record of good GDP growth.

"Indonesia is on a more sustained path of long-term growth among the other countries in Southeast Asia region. However, this is not a time for complacency. Continued efforts are needed to improve the investment climate, and reduce regulatory uncertainly and red tape," said Lindborg.

According to the survey of the level of investment change in the following markets during 2013 conducted by The Economist to 500 respondents from international corporations, Indonesia is in the third position as the best investment destination, after India and China.

Meanwhile, inflation is predicted to remain at a moderate level of 5.2 percent in 2013 and 4.7 percent in 2014 on condition that the government will raise fuel prices in the next two years, according to the ADB.

ADB Deputy Country Director for Indonesia and Senior Country Economist Edimon Ginting predicted that Indonesia`s inflation rate would be higher than expected if fuel prices were increased to ease the burden of fuel subsidies on the state budget.

Regarding the 2014 general elections, the ADB predicted that spending during the parliamentary and presidential elections will contribute to consumption starting from the second half of 2013.

Asked if the elections will have an effect on the inflation rate, Ginting said the elections are a short term event that will slightly affect the economy, but not significantly.

"It might have some effect, but it is too early to predict," he said.
(Uu.A060/S012)

Reporter: A. Fitriyanti
Editor: Priyambodo RH
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