Indonesia 3rd quarter GDP seen up 6.2 percent yoy led by exports - BI

Jakarta (Antara News) - Indonesia's gross domestic product (GDP) in the three months to September is predicted to grow 6.2 percent year-on-year driven by stronger exports, Bank Indonesia (BI) said Tuesday.

BI's public relations director Budi Mulya said investment and private consumption are also expected to underpin GDP growth in the third quarter on the back of stronger consumer purchasing power and improved perception of doing business in the country.

"BI expects the acceleration of growth to continue in the third quarter," he was quoted by Thomson Financial as telling reporters.

In the first quarter to March, GDP rose 6.0 pct year-on-year. The Central Bureau of Statistics has yet to announce second quarter to June economic growth data.

Mulya said Bank Indonesia projects the country's GDP to grow 6.2 percent and 6.5 percent in 2007 and 2008, respectively.

He said the central bank believes that the benchmark interest rate or BI rate, which was kept unchanged at 8.25 percent today, is low enough to continue stimulating economic growth.

"The current BI rate level gives room for the banking sector to reduce their lending rates," he said.

He also said latest data show the banking sector extended 38.5 trillion rupiah worth of loans in June, an increase of 4.4 percent from the preceding month.

Meanwhile, the banking system's net non-performing loans (NPL) ratio dropped to 2.9 percent in July from 3.1 percent in June. (*)
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