BI expects investment to reach Rp1,165 trillion in 2008

Jakarta (Antara News) - Senior Deputy Governor of Bank Indonesia (the central bank) Miranda Swaray Goeltom said she expected that investment in 2008 would reach Rp1,165 trillion to meet the economic growth target of more than 6 percent.

With the need of investment amounting to Rp1,165 trillion, banks have bigger opportunities to finance investment, she said at a function on the conferment of citations to the 2007 financial figures by a magazine in Jakarta on Tuesday.

"Currently, three fourths of investment are funded by banks," she said, adding that in 2008, banks were expected to fund more than three fourths of investment.

Such a condition could be realized if investment on other financial markets would nor grow faster. "If the other financial markets grow better, bank funding would likely lessen," she said.

Meanwhile, she said the banking sector`s growth was now ameliorating. This can be seen from banking indicators like bank credit distribution whose year on year growth reached 24.3 percent and by the end of the year it was expected to reach 25 percent.

The debt ratio over savings now reached 70 percent, the highest since the economic crisis 1998, while the non performing loan (NPL) continued to drop, she said.

Miranda said the central bank was optimistic the economic growth in 2008 would remain above six percent.

She said the economic growth in 2008 could be better than that in 2007 so that the growth in the third quarter would reach 6,3 percent.

The inflation was expected to reach between 6.3-6,5 percent by the end of this year or still within the central bank`s target.

In 2008, she believed the central bank could control the inflation due to pressure mainly from import goods. (*)
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