Indonesian central bank upbeat on 2011 domestic economy

10:29, July 07, 2011      

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Indonesian central bank is optimistic that local economic situation in 2011 would be still in positive track due to various supporting factors, a senior official said here on Wednesday.

"By the end of the year, our economy would be relatively good while in the same times, we don't see the same thing in developed countries," Darmin Nasution, governor of Bank Indonesia told a parliamentary hearing.

He said that condition in the United States, Japan and Europe is still the factor of capital inflow to Indonesia. "However, the number would not be as strong as last year as quantitative easing policy in the U.S. has competed," said Nasution.

He also said that the optimism was based on good figures in the first semester 2011 and not-too-extreme weather.

According to him, Indonesia's economic growth would reach 6.6 percent, higher than 6.5 percent stated by the Finance Ministry.

He also said that the central bank has forecasted rupiah foreign exchange rate against U.S. dollar at 8,650 from 8,744 as of June.

He added that by the end of this year, inflation rate would stand at 5.9 percent.

"However, if there is any fuel price hike, we assume that inflation rate would be at 6-6.1 percent," he said, adding that inflation stands at 0.2 percent per month during the last six months.

Nasution said that food price rise during the second half certainly would impact on inflation rate.

"However, as long as we could respond the rise, there would not be an exaggerated inflation rate," he added.

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