Beyond the predication of economists, Indonesia’s economy could surprisingly grow by
6.4% in quarter II 2012. This was indeed a picture of positive economic
performance. Amidst uncertain global economy growth, moreover amidst sarcastic
remarks that Indonesia was like an aircraft flying by autopilot. Remarkable
indeed.
However, Indonesia must not be off-guard of the threat of
global crisis as indicated by export downturn and deficit of trade balance
which was felt stronger in quarter III and IV. Many economists believed that
the effect of export downturn and deficit of trade balance would not be felt
until quarter III and IV.
With contribution of export to GDP which was not too significant,
downturn of export would certainly be felt, but not in quarter II. It was
estimated that in quarter III and IV Indonesia’s economy would be losing system
and growth would fall to 6% - 6.2%.
The APBN State Budget would be interrupted as well as
energy subsidy continued to swell; even if oil consumption were not condoled
the cost would reach Rp 200 trillion and subsidy for electricity would reach Rp
100 trillion. There were fantastic figures.
A daring proposition came up, that in APBN State Budget
2013 the Government increased price of oil and electricity at reasonable level.
To maintain budget’s health, let’s assume oil price be increased by Rp
1,000/liter to force the people to be thrifty. When under pressure, people
would be sensible enough to live a life of simplicity as a new tradition.
The Central Board of Statistics (BPS) had noted
Indonesia’s economy had grown by 6.4% in quarter II-2012 compared to same
Quarter of 2011. Accumulatively Indonesia’s economic growth through Semester
I-2012 when compared to Semester I-2011 would grow by 6.3%.
Indonesia’s economic growth measured on the basis of GDP
in quarter II-2012 was 2.8% compared to quarter I. The transportation sector
grew highest (10.1%) followed by the trading, hotel, and restaurant (8.9%). The
mining and excavation sectors grew the least, i.e. 3.1%. But in terms of
contribution, trading, hotel and restaurant contributed most to economic growth
(1.6%). Thereafter the processing industry 1.4%, transportation and
communication 1% and the sectors of finance, real estate, and company service
0.7%.
In terms of expenditure, Indonesia’s GDP which totaled Rp
2,050.1 trillion through quarter II-2012 for the most part originated from
household expenditure constituting 53.5% whilst formation of gross fixed
capital (PMTB) air direct investment contributed 32.9% and Government
consumption expenditure 9%. The high portion of KRT was driven by increased
population and uplifted consumption. In addition to that July was signified by
holidays and beginning of fasting month.
In the future the Government and business players must be
on the alert. Global economic slowdown, especially China apparently had great
impact on Indonesia. It seemed reasonable that Indonesia’s economic growth by
end of 2012 was estimated to reached 6.1% - 3.2%. The Government might have the
ambition to attain the level of 6.5%, but objectively the propelling force of
growth would be limited.
According to economists circles the world’s economic
decline especially in China was the main reason why Indonesia’s economic growth
was slowed down. This was because Indonesia was too highly dependent on China
in terms in terms of export and import. If China’ economy slumped by 1% alone,
it would generate the chain effect on other countries including Indonesia.
In June 2012, Indonesia was having the biggest trade
deficit amounting to USD 1.3 billion with China, followed by Japan USD 665
million. Nevertheless domestic consumption and Foreign Direct Investment (FDI)
was still the fundamental propeller of economy. However, Government expenditure
was best to be jacked up in quarter III and IV to substitute the weakening
export. In view of trade balance which would be in deficit till end of year,
the Government was predicted to make intervention and keep deficit from
swelling to more than 2%.
Meanwhile Bank Indonesia remained to maintain benchmark
interest (BI rate) at 5.25% Bank Indonesia was keeping watch over deficit of
current transaction underway because export slumped amidst global unimpressive
economic condition indicated by high import. Bank Indonesia continued to
strengthen policy measures to enhance external balance so deficit of current
transaction could be kept at sustainable level.
BI would maintain stability of Rupiah value in accordance
with Indonesia’s fundamental economic condition. In addition to that to keep
coordinating with the Government in meeting domestic demand in tandem with
stabililizing effort of Indonesia’s macro economy and continuity of national
economic growth.
By the above measure, pressures form the balance of
payment would again be reduced in the second half of 2012. As known, deficit of
current transaction was seen to increase in quarter II-2012. The increase was
seen to increase in quarter II-2012. The increase was on account of lowered
export performance at a time when import, especially raw materials and capital
goods increased notably.
On the other hand capital and financial transaction were
showing notable surplus in the form of foreign direct investment, (PMA)
portfolio investment or overseas borrowing by the private sector. The
development showed that amidst uncertain
global economic condition, foreign investors’ confidence in Indonesia’ national
economic resilience and prospect were still high.
In the second half of this year, deficit of current
transaction was lessened to the level which did not endanger national economic
stability. The estimate was based on the expectations that the global economic
condition and price of export commodity would be better, supported by
responsive policies of BI and the Government.
Investments and import activities of capital goods which
were growth fast lately, were expected to step up capacity of domestic economy
whereby to reduce dependency on import in time to come. Meanwhile forex
reserves by end of July 2012 rose slightly compared to previous month, i.e.,
reaching USD 106.6 billion or equal to 5.6 month of import.
Business News - August 15, 2012
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