Economist from Universitas Gadjah Mada, Prof. Dr. Sri Adiningsih, M.Sc., predicted that Indonesia’s economy would survive amidst the looming crisis in Europe overshadowing the world in 2013. This is different from China and India that survived the global financial crisis in 2008, but experiencing economic growth slowdown in 2012.
In her opinion, the financial market which is the the main channel of affluential global economic uncertainties is one source of Indonesia’s economic vulnerabilities. It’s because the extent of portfolio funding coming to Indonesia in 2012 is predicted to be still a source of economic vulnerabilities by 2013.
“Also, the weakening international trade in 2012 will continue until 2013, so in 2013 Indonesia’s economy will depend on domestic economy such as consumption,” she explained on Friday (28/12) in a discussion Indonesian Economic Review and Outlook 2013 in Faculty of Economics and Business of UGM.
Meanwhile, the high growth of investment will also weaken in 2013. Similar case also happens to non-tradable sector such as transportation and communication, construction, finance, real estate and company services that usually grow high will experience pressures.
Seeing the previous Gama leading economic indicator (LEI), Adiningsih said Indonesia’s economic growth will not differ much from that in 2012, which is 6-6,5%. “Economic authorities are expected to be able to maintain macro-economic stability or financial market better next year so that investment and business climate would not be worsening,” she desribed.
Adiningsih said the various policy that gives stimulus to economic growth needs to be made, too. One option is to reduce fuel subsidies gradually that are transferred to infrastructure development to be able to increase the international competitive power of Indonesian products.
Prof. Dr. Tandelilin Eduardus, M.B.A. , lecturer of the Faculty said that Indonesian domestic economic power to be the stronghold in 2013 is supported by some factors. The stable inflation between 4,5%±1% will encourage domestic economic growth. So is the high domestic consumption, the decrease of unemployment rate, increasing investment flow and exchange rate at fundamental level. “The stable condition of financial system and banking intermediary function is also influential,” he explained.
In 2013 the performance of negotiable instruments in Indonesia also shows positive movement along with the improving domestic economic prospect. It is also encouraged by positive expectations about the improving global economy, particularly in the U.S. and China.