The growth of private consumption is predicted to reach five percent this year."
Jakarta (ANTARA News) - The government is unlikely to achieve a six percent economic growth at the end of this year because the economic growth in the second quarter was disappointing at 5.8 percent, an economist said.

"Indonesia`s economic growth is slowing down and it is unlikely to achieve a six percent growth at the end of this year," economist Gunday Cahyadi of Bank OCBC NISP said here on Thursday.

Speaking to a discussion on "Market Update: Investment Prospect Into 2014," Gundy said that the lower economic growth in the first semester had led the government to lower its economic target this year to 5.9-6 percent from the previous target of 6.3 percent.

"The investment contribution to the economic growth in the second semester is the lowest one since 2009 and it has continued to drop in the last four quarters," he said.

As per June 2013 the investment contribution to the growth was below 1.5 percent of the gross domestic product (GDP).

Gundy said the only positive factor that could boost economic growth in the near future was private consumption which still seemed to be stable.

"The growth of private consumption is predicted to reach five percent this year," he said.

However, despite the many external and internal causes to its conditions, the Indonesian economy is still strong enough in entering 2014, Gundy said.

In the meantime, the government still hoped it would achieve the 6.3 percent target this year.

President Susilo Bambang Yudhoyono has appealed to all sides to work hard to achieve the economic growth target of 6.3 percent for 2013 in the light of the current global economic slowdown.

"As I stated in the draft 2014 state budget on August 16, this year is not an easy year," the President told the press at the Presidential Office on Wednesday following a limited cabinet meeting on economic affairs.

The global economic situation will still show no signs of improvement next year, the President predicted.

"Next year, I think our economy will still face challenges that we will not be able to ignore," he said.

The head of state noted that the rupiah`s weakening against the dollar and the drop in share prices are among the new challenges facing the domestic economy.

It was noted that these challenges are caused by external and internal factors.

"The first factor is global and regional factor, including the US monetary policy, which affects all developing countries, and emerging markets, including Indonesia," President Yudhoyono said.

The internal factor includes weaker exports caused by the global economic slowdown, while at the same time imports remain high, putting a strain on the balance of trade and payments, he noted.

These have all raised concerns that the Indonesian economic growth will fall sharply, while there is no immediate solution to the decline, he said.

The President said the economic growth could be maintained by encouraging, accelerating and implementing various projects in the country.

"Because our exports decline, we rely on investment. Our immediate target is that we will rely on investment. To rely on exports and imports. We must prevent the rupiah`s exchange rate from falling sharply," he said.
(Uu.A014/H-YH)

Editor: Priyambodo RH
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