Yudhoyono Names Siregar Indonesia Investment Board Chief
Indonesian President Susilo Bambang Yudhoyono named Mahendra Siregar to head the nation’s investment agency as he seeks to counter slowing economic growth and a widening current-account deficit.
Siregar, currently deputy finance minister, will replace Chatib Basri as chairman of the Investment Coordinating Board, Firmanzah, senior economic affairs official at the presidential office, said in a mobile-phone text message late yesterday. Basri was appointed finance minister in May.
Economic expansion slowed in the past four quarters, falling below 6 percent for the first time since 2010 in the three months through June. Bank Indonesia raised its key interest rate by a quarter of a percentage point to 7.25 percent on Sept. 12, the highest in four years, as the rupiah fell 16 percent this year. Consumer prices, which rose 8.79 percent last month, may reach 9.2 percent by the year-end, Basri said Aug. 28.
“I don’t expect major policy changes,” said David Sumual, chief economist at PT Bank Central Asia. “If Siregar can accelerate big investments that are already in the pipeline, it can send positive signals to the business community, amid a deficit balance of payment.”
Foreign direct investment in Indonesia rose 18.9 percent from a year earlier to 66.7 trillion rupiah ($5.9 billion) in the second quarter, the slowest pace since 2010, the board said in July. Total investment climbed 29.8 percent from a year earlier to 99.8 trillion rupiah in the three months ended June 30. The nation’s trade deficit widened to a record $2.3 billion in July, weighing on a current account that remained in shortfall for a seventh straight quarter in the three months through June.
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