Nov. 30 (Bloomberg) -- Bank Indonesia lowered its 2012 economic growth forecast, anticipating a global slowdown will lead to a reduction in exports and damp domestic demand, Deputy Governor Halim Alamsyah said.
The central bank estimates gross domestic product will expand 6.3 percent next year, down from its previous forecast of 6.7 percent, Alamsyah said during a seminar in Jakarta today on the global crisis’s effect on Indonesia’s economy. Bank Indonesia expects economic growth this year of 6.6 percent.
“It’s possible to reach growth between 6.3 percent and 6.5 percent next year if there’s acceleration of fiscal expansion,” Alamsyah told reporters after the seminar.
Europe’s debt crisis and a slowdown in the U.S. are sapping export demand. UBS AG predicts the world economy will expand 2.7 percent next year, down from a previous estimate of 3.1 percent, Hong Kong-based economist Wang Tao said in a note Nov. 29. Citigroup Inc. cut its estimate to 2.5 percent from 2.8 percent, the sixth-straight monthly downgrade, economists led by Willem Buiter and Michael Saunders said in a report dated Nov. 28.
Bank Indonesia cut its benchmark interest rate to a record-low 6 percent Nov. 10 to encourage domestic consumption.
To contact the reporter on this story: Novrida Manurung in Jakarta at firstname.lastname@example.org;
To contact the editor responsible for this story: Stephanie Phang at email@example.com