RI’s economy grew by 5.7 percent in 2013: Minister

JAKRTA. Finance Minister Chatib Basri has said Indonesia’s economy grew by only 5.7 percent in 2013, lower than the government’s growth assumption in the revised state budget (APBN-P) which was set at 6.3 percent.

“This year’s economic growth stands in the range of 5.6 percent to 5.8 percent,” said Chatib in Jakarta on Wednesday as quoted by Antara news agency.

He was speaking on the sidelines of a working meeting between the government and the House of Representatives’ Commission XI which oversees finance and banking to discuss Indonesia’s economic projection and evaluation.

“Indonesia’s economy has grown in a much more stable way compared to its ‘peer countries’. Among G20 member countries, Indonesia only lags behind China, whose economy grew by 7.8 percent in the third quarter,” said Chatib.

The minister added that the inflation rate in 2013 was expected to reach 8.5 percent year-on-year and the average rupiah exchange rate by the end of this year was expected to be Rp 10,435 per US dollar.

“This projection is in line with Indonesia’s recorded inflation which stood at 8.37 percent year-on-year until November while as of Dec.16, the rupiah exchange rate stood at Rp 12,105 per US dollar, or a depreciation of 23.61 percent since the beginning of this year,” said Chatib.

He said the rupiah continued to weaken as oil imports and foreign fund outflows, triggered by the ongoing current-account deficit and potential ‘tapering’ of the US Federal Reserve’s quantitative easing policy remained high.

“Moreover, the market is still waiting for the effectiveness of the economic policies of the government and other authorities to become apparent. This means the rupiah continues to depreciate,” said Chatib.