IMF Prediction on Indonesian Growth 2007

By Barrie | January 5th, 2007 | No Comments

The International Monetary Fund (IMF) has predicted that Indonesia’s economic growth rate in 2007 will reach only 6 percent because new investment is likely to take place only after the first half of the year.

“I think it will be 6 percent as many quarters and analysts have projected,” IMF Representative in Indonesia Stephen Schwartz was quoted as saying by Antara news agency on Thursday.

He said the government’s target of 6.3 percent was an “ambitious” one. “But it could be achieved if the government is able to improve the investment climate and carry out infrastructure programs well.”

Bank Indonesia (BI) Governor Burhanuddin Abdullah predicted on Wednesday the country’s economy would grow by around 6 percent this year.

According to Schwartz, investment and exports in 2007 would increase slightly but exports which had been growing briskly of late would decline throughout the year.

He said the year-on-year value of exports in December increased by more than 29 percent but their volume grew only 10 percent.

About economic growth in 2006, he said it could be 5.5 percent.
Economist Aviliani of the Indonesia Awake Team (TIB) also said the government’s 2007 economic growth target of 6.3 percent was difficult to achieve because the government still had little commitment to improving infrastructure and the investment climate.

Fund allocations from the state budget for infrastructure development in 2007 were still not enough, she said.

“In the 2007 state budget, the allocation for infrastructure is only 100 trillion rupiah (about 10 billion U.S. dollars), while in the private business community’s view the ideal budget for this sector is 300 trillion rupiah (30 billion U.S. dollars),” Aviliani said.

Editor: Luan Shanglin

Source: XinhuaNet.com