Indonesia's GDP grows 5.7% at Q1

08:24, May 11, 2010      

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Indonesia's economy grew at 5.7 percent at the first quarter this year spurred by exports and consumption, the National Statistic Bureau and analyst said here Monday.

The Southeast Asia's largest economy's exports rose by 53.68 percent to 35.39 billion U.S. dollars in the first three months this year, from that of the same period at last year, the bureau announced on May 3.

"The sectors of trade, hotels and restaurant have mainly contributed on the economic growth in the first quarter," head of the bureau Rusman Heriawan told a press conference.

The country's exports is seen to rebound to 18.9 percent and investment at 7.8 percent this year, former finance minister Sri Mulyani said on April 9, thank to the expectation of the country's risk to investment grade and raising global demands and prices of commodities.

"Exports have given its contribution on economy. Like Singapore when its exports rebound, its economy grow fast at this time, compared to that of at last year when its exports were down its economy also did not grow," analyst from CIMB Niaga bank Winang Budoyo told Xinhua Monday.

The Southeast Asia's largest economy grew at 5.4 percent in the last quarter of last year and is forecast to grow at 5.8 percent this year on the strong exports and investment. For the next year, the growth is targeted at 6.3 percent.

"It indicated that there is a trend of iincreasing on the economic growth. We think that the economy may accelerate at 6 percent at the end of this year," he said Budoyo.

The country's state reserve reached over 78.6 billion U.S. dollars, according to the central bank website.

Rupiah which has strengthened recently, was traded to 9,120 per one U.S. dollars on Monday.

Strong rupiah has reduced imports cost, allowing the central bank to refrain from rasing interest rate and kept on hold at 6.5 percent on May 5, which could boost consumer sentiment in the country with over 230 million population.

Holding interest rate at record low has spurred banks to increase loans distribution by 14 percent to 161.8 billion U.S. dollars in the first four months, according to Research and Banking Regulation Director at the central bank Halim Alamsyah, as quoted by Bisnis Indonesia as saying.

Annual inflation in April reached to 3.91 percent, the highest in ten months, due to higher food prices, the bureau announced on May 3. The government targetted the inflation will end at 5.3 percent at the end of this year.



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