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Thursday, November 3, 2011

Indonesia Economic Update

Central Bureau of Statistics(BPS) has announced a deflation of 0,12% for October 2011. The main source of deflation is a decline in gold prices in October. For this year, deflation has occurred for 3 months, namely March, April, and October.

For cumulative from January to October 2011 inflation 2.81%. The government set a target of inflation at the beginning of the year by 5% for 2011, meaning the remaining 2.19% for 2 months.

Cumulatively, Indonesia's economic growth in the first half of 2011 compared with first half of 2010 grew by 6.5%. Draft Budget 2011 and BI targeting economic growth of 6.4% and from 6 to 6.5%.

So until now, Indonesia still recorded positive economic growth, where economic growth is greater than the inflation rate. When we give a scenario of inflation in November and December at 1.5%, where the inflation rate is usually elevated at the end of the year, then in 2011 Indonesia will record inflation of 4.31%. If we assume economic growth of 6.4% can be achieved this year with a 4.31% inflation, then in real terms Indonesian economy grew about 2%.

We are optimistic that economic growth (GDP) if it is reduced by inflation in 2011 will remain above 2%. Thus, so far we can say the government has managed to keep the pace of economic growth and keep inflation in the midst of a global crisis that is happening.

Arman Boy