Thursday, 24 July 2008

Steady Q1 GDP growth on spending

The economy is estimated to have grown by around 6.2-6.3% in the first quarter from a year ago, as steady consumer spending underpinned growth, the finance ministry said on Wednesday (09/04/08), Reuters reported.The estimate compared to annual 6.25% growth in the last quarter of 2007 and 6.32% expansion for the whole of 2007, which was the fastest annual growth rate since 1996. Anggito Abimanyu, head of fiscal analysis at the finance ministry, said steady consumer spending should support growth, despite problems in the global economy and the threat of inflation. Exports performed strongly in the fourth quarter of last year, supported by global demand for commodities such as palm oil and rubber, while consumer spending and private investment were steady following interest rate cuts. The government has cut its GDP growth forecast for 2008 to 6.4% from 6.8% because of concerns over the global economy. Bank Indonesia said Monday that full-year economic growth is expected to slow slightly to 6.2% this year from 6.3% in 2007, and is likely to be between 6.2% and 6.8% next year, Dow Jones reported. The central bank said growth is expected to be between 6.7% and 7.4% in 2010; between 7.2% and 7.8% in 2011; and between 7.4% and 8% in 2012. For this year, the central bank predicted in a publication that household consumption would grow 5.4%; government spending to rise 3.8%; investment to increase 9.3% and exports to be up 7.9% and imports to gain 7.9%.The central bank predicted the unemployment rate to be around 9% at the end of this year. The World Bank earlier cut its Indonesia's 2008 growth forecast to 6.0% from 6.4%, and expects 6.4% growth in 2009.

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