May 14 (Bloomberg) -- Indonesia's economy probably grew by
more than 6 percent for a sixth quarter as the lowest interest
rates in three years spurred spending on homes and cars.
Southeast Asia's biggest economy expanded 6.2 percent in
the three months to March 31 from a year earlier, about matching
the 6.25 percent expansion in the preceding period, according to
the median forecast of 17 economists in a Bloomberg News survey.
The Central Statistics Bureau will release the data in Jakarta
tomorrow.
Private consumption, which accounts for about 70 percent of
the economy, is likely to cool amid plans by the government to
raise fuel prices by as much as 30 percent to ease a subsidy
bill estimated at about 14 percent of total revenue. Spending
may also drop after Bank Indonesia raised borrowing costs for
the first time in more than two years to tame the fastest
inflation in 19 months.
Without a reduction in subsidies ``the long-term goals of
economic development are compromised by the near-term objective,
which is maintaining artificially low fuel prices,'' said Helmi
Arman, an economist with PT Bank Danamon Indonesia in Jakarta.
Crude oil prices have risen 30 percent this year,
increasing the burden on the government, which has kept local
gasoline, diesel and kerosene prices steady for almost three
years by increasing subsidies.
Concern the deficit would widen partly explains why
Indonesian bonds have handed holders a loss of 8.8 percent this
year, the worst performance of 10 Asian local-currency debt
markets, according to indexes compiled by HSBC Holdings Plc.
Market Sentiment
The last time investors lost faith in the government's
ability to curtail its budget deficit in the face of rising fuel
costs, investors dumped Indonesian assets, causing the rupiah to
tumble 7 percent to a four-year low in August 2005.
``The most immediate thing to tackle is how to improve
market sentiment so that interest in Indonesian assets is re-
invigorated,'' said Arman.
Finance Minister Sri Mulyani Indrawati said May 7 the
government may spend 14 trillion rupiah ($1.5 billion) this year
to compensate 19.1 million poor families for lost income after
it raises fuel prices.
A side-effect of the increase in fuel prices will be higher
inflation, which may damp economic growth further. Lehman
Brothers Holdings Inc. expects higher fuel prices to drive year-
on-year inflation to 12 percent in June from 8.2 percent in
April.
Interest Rates
``The longer inflation stays high, the greater the negative
impact on economic growth,'' said Robert Subbaraman, chief Asian
economist at Lehman Brothers Hong Kong, citing the effects of
lower profit margins and reduced spending power among consumers.
Subbaraman expects another 25 basis point increase in
interest rates in July. Bank Indonesia on May 6 raised its
policy rate to 8.25 percent, from 8 percent, the first increase
in more than two years.
Gross domestic product rose 2.1 percent in the three months
ended March 31 from the fourth quarter, nine economists in the
survey said.
Consumption, which includes construction spending, probably
expanded 5.5 percent in the first quarter. That about matched
the previous period, which was the fastest since the first
quarter of 2004.
Economic growth may slow to 6 percent in 2008 from 6.3
percent last year, Sri Mulyani said on May 6.
The following is a table of economists' forecasts
Indonesia GDP Estimates
----------------------------------------------------------<br /> 1Q 1Q<br />Firm YoY QoQ 2007 2008<br />----------------------------------------------------------<br />Median 6.20% 2.05% 6.00% 6.00%<br />Average 6.21% 2.06% 5.95% 5.89%<br />High 6.50% 2.32% 6.50% 6.50%<br />Low 5.40% 1.70% 5.30% 4.80%<br />Number of Estimates 17 11 14 13<br />----------------------------------------------------------<br />Action Economics 6.30% 2.00% 5.30% 5.50%<br />Bank Intl Indonesia 6.13% 2.00% 6.00% 6.40%<br />Bank of America 6.20% -- 5.80% 5.50%<br />Bank Danamon 6.11% 1.70% 5.90% 6.30%<br />Danareksa Securities 6.46% 2.32% 6.29% 5.91%<br />DBS Group 6.20% 2.10% 6.30% 6.50%<br />HSBC 6.50% -- 6.50% 5.30%<br />Ideaglobal 6.20% -- 6.00% 6.00%<br />ING Groep NV 6.30% 1.90% -- --<br />JPMorgan Chase 6.00% -- -- --<br />LippoBank 6.18% 2.05% 5.60% 5.62%<br />Mandiri Securities 6.18% 2.00% 6.00% 6.10%<br />Nomura Securities 5.40% -- 5.30% 4.80%<br />Samuel Sekuritas Indonesia 6.48% 2.17% 6.40% 6.40%<br />Standard Chartered 6.30% 2.20% 6.00% 6.20%<br />Sumitomo Mitsui Banking 6.30% 2.20% 5.90% --<br />UBS 6.30% -- -- --<br />----------------------------------------------------------<br /><br />--------------------------------------------------<br /> Private Govt<br />Firm Cons Exports Spend<br />--------------------------------------------------<br />Median 5.50% 8.00% 6.90%<br />Average 5.50% 11.14% 6.65%<br />High 6.11% 29.60% 17.70%<br />Low 5.09% 3.80% -2.50%<br />Number of Estimates 10 10 9<br />--------------------------------------------------<br />Action Economics 5.60% 15.00% --<br />Bank Intl Indonesia 5.09% 7.86% 3.86%<br />Bank Danamon 5.50% 7.20% 3.10%<br />Danareksa Securities 5.65% 15.74% 9.89%<br />DBS Group 5.10% 8.10% 6.90%<br />LippoBank 6.11% 6.24% 2.44%<br />Nomura Securities 5.10% 3.80% 7.50%<br />Samuel Sekuritas Indonesia 5.50% 29.60% -2.50%<br />Standard Chartered 5.30% 7.90% 17.70%<br />Sumitomo Mitsui Banking 6.00% 10.00% 11.00%<br />--------------------------------------------------<br />Source:news.yahoo.com<br /><br />
0 comments:
Post a Comment