Citing Risks, Central Bank Predicts GDP Growth of 5.2 % for Indonesia

Jakarta Globe, January 24, 2010

Bank Indonesia has forecast that the economy will grow 5.2 percent this year, lower than the 5.5 percent growth predicted by the government and some economists.

Darmin Nasution, the acting governor of the central bank, said late on Friday that the economic recovery remains dependent on how successfully large countries can withdraw their stimulus packages as well as on how Indonesia’s main trading partners fare.

“The economy is predicted to grow around 5.2 percent in 2010 and subsequently to 6 percent in 2011,” Darmin said. He added that the 5.2 percent growth forecast would also be subject to how well the country could manage several main challenges, including improving both infrastructure and the investment climate.

Darmin also admitted that ineffective disbursement of credit to the corporate sector remained an obstacle to promoting economic growth. 

JG