ADB Estimates Indonesian 5.4 Percent Economic Growth in 2006
Wednesday, 06 September, 2006 | 18:11 WIB

Tempo Interactive, Jakarta: The Asian Development Bank (ADB) has estimated that Indonesia’s economic growth in 2006 will be around 5.4 percent.

This is lower than the government's projection of 5.8 percent in the 2006 Revised State Budget (RAPBN).

In the Asian Development Outlook 2006 Update, ADB states that the increase of both oil-based fuel prices and bank interest rates in the 2005 resulted in a decrease in Indonesian economic growth in 2006 to five percent compared to the 5.9 percent in the same period last year.

Fiscal policies that have increased development expenditures and reduced the impact on oil-based fuel price increases have helped economic growth during the second half of 2006 to rise.

At the same time, Bank Indonesia has slowly decreased its interest rate so that the ADB has projected an increase of economic growth with 5.4 percent by the end of the year.

However, according to the ADB report, Indonesia is capable of recovering next year.

In 2007, Indonesian economic growth may reach 6 percent which is lower than the government's target in RAPBN 2007 of 6.3 percent.

Padjar Iswara
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