BI Revises 2008 Economic Growth

Monday, 21 May, 2007 | 15:56 WIB

TEMPO Interactive, Jakarta: Bank Indonesia (BI) has estimated that economic growth in 2008 will reach between 6.2 and 6.8 percent.

This is higher compared to the previous estimate of between 5.7 and 6.7 percent.

This optimism, according to BI Governor Burhanuddin Abdullah, is supported by Indonesia's macro economic condition achievements during the third first which have been continually increasing.

“Up until the second quarter, it is estimated that growth will reach 5.9 percent,” he said during a hearing with the House of Representatives (DPR) Finance and Banking Commission at the Parliament Complex, Jakarta, on Monday (21/5).

Burhanuddin went on to say that the optimism was also supported by private consumption which is increasing in line with the rise of the government's deficit to 1.5 percent from previously 0.9 percent.

The rise of this year's deficit is especially used for disaster handling and infrastructure rehabilitation.

So it is estimated that next year's investment will be more significant compared to this year, which is still low.

“We see that there is a change of growth prospect to be between 6.2 and 6.8 percent. This is in line with regulation implementation and investment realization in 2008,” said Burhanuddin.

According to him, the Rupiah exchange rate until the end of year was estimated to continue strengthening with lower fluctuations.

BI expects that the stability of the Rupiah will be more and more maintained.

Despite being optimistic about next year's economic growth, Burhanuddin said the central bank must continue sustaining the inflation assumption of five plus minus one percent.

“We predict that inflationary pressure will still be high,” he said.

SURYANI IKA SARI