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Yudhoyono: Indonesia to grow 6.5 percent

16th August 2012 | 1.325 Views
Jakarta (ANTARA News) - President Susilo Bambang Yudhoyono unveiled the country`s 2013 state budget today predicting the country`s economy to expand 6.3-6.5 percent this year.

The country`s economy is growing amid global slowdown on strong domestic demand, he said in a state of the nation address at a plenary session of the House of Representatives.

The country`s economy grew 6.3 percent in the first quarter and 6.4 percent in the second quarter also driven by strong domestic demand.

The plenary session was held traditionally on the eve of the country`s independence day on August 17.

"Exports have slowed down lately but the downtrend was offset by strong investment and consumption sector. The people`s purchasing power continues to gain strength with the growing middle class that contributes to pushing up domestic consumption," he noted.

Investment has continued to pick up to follow the improvement in the country`s debt rating, lifting the country`s status to investment grade, he said.

In the first half of 2012 , the country`s investment sector grew 11.2 percent.

However, the president warned that the uncertainties as a result of the global economic crisis remains a threat .

The condition is more complicated and unhealthy marked by soaring prices of foodstuff and volatility of oil market, he said.

"With the prevailing condition, the world`s economic growth for 2012 has been revised down from 4 percent to 3.5 percent and with stronger risks of deeper fall. The world`s trade growth rate also is forecast to shrink from 4 percent to to 3.8 percent," he said.

He said the year of 2013 also looks gloomy still shadowed by uncertainties, noting the world`s economic growth forecast has been revised down from 4.1 percent to 3.9 percent and the world`s trade is predicted to grow only 5.1 percent lower than previous projection of 5.6 percent.

He said so far the country has succeeded in keeping its inflation under control .

The country`s inflation in the first seven months of the year was 4.56 percent on-year lower than 4.61 percent in the same period last year.

Based on the trend, the country`s inflation could be controlled to be not more than 4.8 percent, he said.

"In order to maintain the country`s economic stability and improve the people`s welfare, the government in its macro economic policy has continued to attach more importance to keeping inflation under control," he said.

Therefore, good and solid coordination and synergy between the government and Bank Indonesia need to be maintained or improved to keep inflation under control, he said. (*)