For Your Life and Yours

JAKARTA, Bank Indonesia predicts the country’s economy could grow five percent in the second quarter if Indonesia could positively respond improving global condition. The central bank’s deputy governor, Hartadi A Sarwono, said here on Friday Indonesia’s economy grew 4.6 percent in the first quarter which was higher than BI’s forecast of around three to four percent in spite of the fact that conditions did not yet fully recover.

"To me, not to grow negatively in the current situation is a blessing because other developed countries recorded negative growth," he said. He said in Asia Indonesia was the third country after China and India that could still record positive growth while the economy of other countries grew negatively.

"Indonesia’s positive growth was driven by factors such as large domestic market, private investment, increasing exports," he said. "The country’s domestic market is large because the country’s population is the third largest in the world."

He said investment could still grow namely in the fields of gas and oil which was projected at around US$2.9 billion and non-oil and gas predicted at around US$800 million. He said oil and gas projects be the government or semi-government projects still continued running.

He said if global condition remained optimistic with China and India continuing to improve it could affect positively on investment in the country. He said several non-oil and gas sectors such as telecommunications were still good and could still expand. Citing an example he referred to Q-Tel, that had bought Mobile 8 at a large investment value.

He said China planned to invest in Indonesia through the 10,000 megawatt electricity development program. "If China has made the deal and the project runs it means investment enters into Indonesia," he said.

Indonesia’s exports, he said, have also started to improve in April 2009 compared to January and February which dropped.