Indonesia demonstrates excellent economy amid slowdown in Asia Pacific: UN report

MYsinchew, Business Foreign  2012-05-10

JAKARTA, May 10 (Xinhua)-- Indonesia, the largest economy in Southeast Asia region, is estimated to prevail amid economic slowdown in Asia Pacific region this year thanks to its strong domestic demand, increasing investment and correct fiscal policies, a survey carried out by a United Nations (UN) agency revealed Thursday.

Citing results of a survey carried out by United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), Katinka Weinberger, director of UNESCAP's subsidiary body of Center for Alleviation of Poverty through Sustainable Agriculture (CAPSA), said that Indonesia has great potential to attain 6.5 percent growth this year due to its sound economic parameters. "Indonesia has been demonstrating tremendous growth during crisis periods in the last few years. It posted record breaking growth of 6.5 percent last year, the highest since 1997 crisis and was higher than the 6.1 percent in 2010," Katinka told a press conference.

Indonesian government has revised its growth target this year from 6.7 percent to 6.5 percent due to ongoing global economic hardship incited by economic woes in Europe and the United States that slowed down growth in most global economies.

International agencies estimated that Indonesia's growth will likely reach 6.1 percent. Indonesia posted 6.3 percent growth in the first three months this year.

She said Indonesia has demonstrated good consumption expansion of 4.7 percent last year, spurred by rising incomes, lower borrowing costs and steady declining inflation. The country also saw tremendous foreign and domestic investment growths of 18 percent and 26 percent respectively from a year earlier. "Its gross fixed capital formation also increased steadily in the past decade, reaching 11 percent of the GDP last year,"she said.

Indonesia recorded an export volume of 204 billion U.S. dollars last year, a 29 percent growth from a year earlier. It broke new record as Indonesia was capable of doubling its export value within five years, making it par with top world's exporter countries. "Indonesia saw average inflation at 5.4 last year, from 5.1 percent in 2010 and 4.8 percent in 2009. In January last year, Inflation peaked at 7 percent, but fell steadily through the year to 3.8 percent in December,"she said.

Explaining the Asia Pacific economy outlook, Katinka said that the region would see decelerating growth amidst the second stage of crisis in 2011 that initially began in 2008-2009, caused by Euro zone crisis and uncertain outlook in U.S. economy.

Growth rate of emerging economies in Asia Pacific region dropped to 7 percent last year from 8.9 percent achieved in 2010. UNESCAP survey results estimated that growth in the Asia Pacific region would reach 6.5 percent this year.