Indonesia Immune from Global Slowdown: President

JAKARTA ~ Any global economic slowdown would have a limited impact on Indonesia’s growth this year, President Susilo Bambang Yudhoyono said this week.

Yudhoyono told a gathering at the Indonesian Stock Exchange on the first trading day of the year that the domestic economy was now more resilient to external shocks.

“Our economic fundamentals are okay. We’re able to weather the impact of the subprime crisis and high crude oil prices,” he said.

The banking system in Southeast Asia’s largest economy does not have any exposure to the US subprime mortgage market, Yudhoyono said.

In 2008 Indonesia would still face volatile global markets and oil prices as well as increasing inflationary pressures, he said.

“But we don’t have to worry too much. Our economic prospects are still good,” Yudhoyono said.

Although global demand may weaken, he said he believed the economy should still benefit from the export of energy and other commodities.

Domestic demand should remain strong this year and the government plans to roll out infrastructure projects from 2008 to 2010 to further stimulate growth, he added.

On monetary stability, Yudhoyono said conditions were also supporting growth as interest rates were now relatively low. Bank Indonesia’s benchmark BI rate stands at 8 percent.

“These are opportunities. Don’t miss them,” he said.

Last month the government revised down its 2008 economic growth forecast to a range of 6.4-6.7 percent from a previous projection of 6.8 percent amid record high oil prices.

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