Inflation Continues to Haunt the National Economy in 2011

JAKARTA: The economic growth in 2011 is estimated higher than this year with a projected 6.6% optimistic and pessimistic projections of 6.3%.
Research Bureau Director Eko B Supriyanto Infobank Infobank Outlook 2011 in his presentation today said 2011 economic growth was driven largely consumption sector.

`Economic growth in 2011 was not only driven by consumption sector, but also there is an increase of the contribution of investment,` said Eko in the National Seminar on Outlook 2011 `Round Up Economic Growth: Credit expansion Finding Momentum` today.

Eko said that the increased consumption, investment began to move, and the increase of exports and imports will affect economic growth in 2011. Nevertheless, the danger of inflation is predicted to continue to haunt in 2011.

As of October 2010, the rate of inflation has led to 5.6% and up to the end of the year is estimated to be in the range of plus minus 5%. There is also the next year, inflation is expected plus minus 6%, where the source of more inflation coming from the supply side due to a permanent condition, the constraint distribution.

Eko said that if inflation continues to creep according to the estimate plus minus 6%, Bank Indonesia will implement the policy of raising interest rates in 2011.

`Expect BI rate will move in the range of 6.5% -7.25% and started in the quarter I/2011. This condition will be more depressed if there is an increase in oil prices that are not controlled, `he said.

In addition to inflation and pressures on interest rate hikes, other risks for the government is the world's economic recovery is still a mystery viewed from the economic slowdown in the U.S., Japan and China in late 2010.

By : Eko B Supriyanto (Director of Research Bureau Infobank)
Source : Bisnis Indonesia Translated : Using google Translater facilities