Chatib Basri: GDP Growth Indonesia in 2014 Should Be Revised Down to 6%
Finance minister Chatib Basri said that the Indonesian government should revise its outlook for GDP growth in 2014 from 6.4% (mentioned in the 2014 State Budget) to about 6.0%. A more realistic outlook, which is in line with the current global and domestic financial context, is needed. Global uncertainty due to the possible ending of the Federal Reserve's quantitative easing program has resulted in capital outflows from emerging markets, including Indonesia. Various countries, developed and emerging ones, have lowered outlooks for 2014 GDP growth.
The global economy is still fragile in 2014 as can be seen in the downgrade of expected global economic growth from 3.8 percent to 3.5 percent. Moreover, prices of commodities (a vital asset of Indonesia's exports) are expected to stay rather weak next year. Meanwhile, interest rates will stay high and the rupiah is expected to continue its weakening trend until the beginning of 2014. The finance minster stated that one of the most important tasks now is to push inflation back to a normal level (about 4.5 percent) in order to safeguard people's purchasing power. In July, inflation reached 8.61 percent year-on-year.
| State Budget Draft 2014 |
|
| GDP Growth annual percent change |
6.4 |
| Inflation annual percent change |
4.5 |
| Exchange Rate IDR/USD |
9,750 |
| Treasury Bills Interest Rate 3-month, percent |
5.5 |
| Indonesian Crude Oil USD $ per barrel |
106 |
| Oil Lifting thousand barrels per day |
870 |
| Natural Gas Lifting barrel of oil equivalent/day |
1,240 |
Source: Investor Daily