Indonesia Signals Dwindling Export Growth on Risks From Europe
Indonesia would accept little or no export growth this year as Europe’s sovereign-debt crisis undermines an earlier target for a 12 percent increase in overseas sales, Vice Minister of Trade Bayu Krisnamurthi said.
The government didn’t expect the problems that arose in Greece, Spain and Italy when it made the projection at the beginning of the year, Krisnamurthi said in an interview in Hong Kong today.
“The level of uncertainty in Europe is very high,” he said. “If we could match last year’s level of exports then we are already satisfied. Flat growth, maybe a small one.”
Policy makers in the region have come under increasing pressure to protect their economies from weakening global demand, and Indonesia said in June it will implement stimulus measures to spur consumption and infrastructure spending. The Southeast Asian nation’s exports fell in May and April from a year earlier.
Krisnamurthi said earlier this week export growth could be as much as 5 percent this year. He said in January the government expected overseas sales to rise to $230 billion this year. Indonesia’s exports totaled more than $203 billion in 2011.
The central bank will probably keep its benchmark interest rate unchanged at 5.75 percent tomorrow, all 20 economists surveyed by Bloomberg News predict, refraining from raising borrowing costs even as a declining currency threatens to boost inflation pressure.