WORLD BANK ECONOMISTCHIEF BELIEVES INDONESIA’S GDP TO GROW 5.3 PERCENT

Jakarta, 9 Muharram 1437/22 October 2015 (MINA) – World Bank Chief Economist for Indonesia Ndiame Diop estimates Indonesia’s Gross Domestic Product (GDP) for 2016 will grow 5.3 percent, despite risks will accompany it.

“Currently we estimate Indonesia’s GDP growth in 2016 at 5.3 percent, but the projection is accompanied by risks,” said Ndiame during the launching of Indonesia Economic Quarterly Progress Reports (Indonesia Economic Quarterly/IEQ) October 2015 edition here Thursday.

These risks include the possibility of rising US interest rates, a slowdown in the country’s trading partners such as China, and weakness in the private sector due to depreciated exchange rates and reduced profit margins, Mi’raj Islamic News Agency (MINA) quoted Antara News as reporting,

“As well as the drought due to the El Nino weather pattern,” he said.

The impact of El Nino, said Ndiame, is the increasing price of rice by 10 percent for 2015 as well as the inflation index of average prices of goods and services consumed by households (CPI) could reach 0.3 to 0.6 percent.

According to Ndiame, those who will feel the greatest impact of the rising prices of goods are poor households because they use most of their income on food.

Therefore, efforts to help businesses and communities, as well as regulatory reforms to cope with the bureaucracy to investment and exports, would be helpful.

“Likewise, a variety of other reform efforts that will strengthen the investment climate and encourage growth,” he said.

Atention should also be given to the manufacturing sector and tourism, which has been much less explored, in order to increase revenue and to prevent the current account deficit increased again as growth strengthens.

World Bank, Ndiame said, the increased absorption of budgets in the third quarter, is estimated to have reached 21.4 percent in real terms during the first nine months of 2015, compared to same period last year.

“It can support growth. In addition, the government’s efforts in improving the planning and implementation of the project is expected to improve the investment growth rate of 3.2 percent in the second quarter,” said Ndiame. (T/R07/R01)

Mi’raj Islamic News Agency (MINA)