Despite recent widespread euphoria within the financial sector after Indonesia regained investment-grade status from international rating agencies, senior economists have warned that the global economic slowdown could hinder Indonesia’s economic growth.
The economists said that with the poorer than expected global economy, it would be difficult for the
government to achieve its economic target of 6.7 percent growth
this year, as the decline in exports as a result of the fall in the global demand would slow the country’s economy.
“The 6.7 percent growth target is too optimistic and it is difficult to achieve because we have not seen any progress in the crisis in Europe. Greece’s condition is actually getting worse,” senior economist at Standard Chartered Bank Fauzi Ichsan said in Jakarta on Thursday following the bank’s seminar “Fragile West, Resilient East”.
“In the worst-case scenario, the Indonesian economy could grow by only 5.8 percent this year,” he added.
The government earlier said it was optimistic that the country’s GDP growth target of 6.7 percent this year could be achieved as high consumer spending and exports were expected to power economic growth. Indonesia’s GDP growth reached 6.5 percent in 2011 rising from 6.1 percent in 2010. » Read more: Global woes may slow GDP growth to below 6 percent