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Indonesia`s economic growth best after China

5th January 2013 | 3.487 Views
Indonesia`s economic growth best after China
Agus Martowardojo. (ANTARA)
Jakarta (ANTARA News) - Finance Minister Agus Martowardojo said Indonesia`s economic growth in 2012 was good, rating it as the best after that of China.

"Indonesia`s economic growth was likely the second best after that of China in 2012. The economic growth of other countries like India and Brazil is below ours," the finance minister said here on Friday.

He said that the present condition enabled Indonesia`s economic growth to reach 6.3 percent at the end of last year. Indonesia`s economic growth was outclassed only by that of China which reached 8.6 percent.

"If in the fourth quarter of last year the Indonesian economy grew 6.1 to 6.4 percent that would mean that Indonesia`s year-on-year economic growth would reach 6.3 percent. So, this is what made us optimistic," the finance minister said.

Acting Head of Fiscal Policy of the Ministry of Finance Bambang Brodjoegoro said Indonesia`s economic growth did not reach the target at 6.5 percent because the capital expenditure was not realized based on expectation.

"We should be able to reach 6.5 percent but we miss the target, reaching only 6.3 percent. This could be because we were not able to realize our expenditure, particularly capital expenditure," he said.

The Central Statistics Agency (BPS) said the domestic economy grew by 6.3 percent in the first quarter of 2012 on a year-on-year basis, or 1.4 percent on a quarter-to-quarter basis, with the farming, forestry, and fishery sectors being the top contributors to the growth, with 20.9 percent.

Yet, the nation missed its economic growth target of 6.5 percent for the first quarter of 2012 by 0.2 percent.

Of note, the Indonesian economy surprisingly picked up 6.4 percent in the second quarter of last year, fueled by strong domestic consumption and investment. The high growth in the quarter ending June 2012 suggested that Indonesia remained resilient, in spite of global financial woes.

At the same time, the domestic economy fell to a two-year low of 6.17 percent for the quarter ending September 2012 due to low demand from the nation`s major trade partner, China.

According to the BPS, the third-quarter growth was boosted by a hike in fixed gross capital formation by 10.02 percent and household consumption expenditures of 5.68 percent.

Further, the largest quarter-to-quarter growth in the third quarter was recorded in the agricultural sector at 6.15 percent, due especially to a 23.43 percent hike in the agriculture sub-sector.

"The figures show our agricultural sector made a significant improvement from 2.34 percent in the second quarter, following abundant harvests," BPS chief Suryamin said.

The growth in the GDP in the third quarter was contributed mostly by the transportation and communication sector that grew 10.48 percent.

Indonesia`s central bank predicted the full-year economic growth would reach 6.3 percent in 2012, fueled by high domestic consumption. Overall, the Indonesian economy in 2012 and 2013 is predicted to expand 6.1 to 6.5 percent and 6.3 to 6.7 percent, respectively, Bank Indonesia Governor Darmin Nasution said.

In its evaluation of the Indonesian economy, the bank`s board of governors said the domestic economy is expected to grow at a high pace this year, although the growth will not be as high as expected.

However, officials at Asian Development Bank (ADB) project Indonesia`s economic growth by the end of 2012 will be below 6.4 percent, or lower than April`s forecast of 6.4 percent.