... BI rate hike from seven percent to 7.5 percent is one of the factors holding back foreign investors from making new investments... "Jakarta (ANTARA News) - Indonesia's economy is expected to slow down in 2014 as a result of being impacted by various domestic and foreign factors, said market analyst Surjanto Yasaputera here on Thursday.
"The BI rate hike from seven percent to 7.5 percent is one of the factors holding back foreign investors from making new investments," he stated.
Another obstacle that will put pressure on the economy is the country's general election. The public will focus on the electoral process to thwart any cheating attempts by the candidates, said Surjanto.
This will prompt the people to adopt a wait and watch policy, which will further dampen economic growth.
However, since economic activity in the small and medium enterprises (SMEs) sector is continuing, the economy is still growing, he remarked.
For example, the tobacco industry continues to grow from year to year despite any prohibition or information drives to stop people from smoking cigarettes.
The weakening economic growth in Europe and the United States might also affect the Indonesian economy and hamper its growth.
Indonesian exports abroad continue to decrease, while imports have increased. This has resulted in a high state deficit, he added.
Meanwhile, Indonesian businessman Helmy Yahya said he was optimistic that despite the slow economic growth, the economy will continue to run.
"We are optimistic that the market is still sought after by foreign investors, although this time they have chosen to remain silent and observe the market's future conditions," he noted.
Editor: Ade P Marboen
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