Indonesia lowers growth target this year to 6.5%

Indonesian government has trimmed down its growth target this year initially set at 6.8 percent to 6. 5 percent as its economy is still impacted by the ongoing global economic slowdown.Indonesian Finance Minister Agus Martowardoyo said that impacts from the ensuing global economic crisis was apparently seen in the country's export and investment growths that have been slowing down in the last few months.Besides that, the increasing inflation also hinders the country 's effort in attaining higher growth, the minister said."We continue to watch our best efforts to attain 6.8 percent growth this year. But unfortunately we estimated at 6.5 percent," the minister said in a hearing with legislators at the parliament on Thursday.Indonesian central bank (BI) recorded increasing inflation in the first three months this year from 4.57 percent in January to 5. 31 percent and 5.90 percent in February and March respectively.The largest economy in Southeast Asia region also saw its export reduced by 4.5 percent in Feb. this year to 14.99 billion U. S. dollars if compared to the corresponding period last year.The country expects a 400 trillion rupiah (about 41.2 billion U. S. dollars) of foreign direct investment (FDI) this year.Indonesia posted 6.23 percent growth last year. That figure was lower than 6.5 percent growth rate it booked in 2011.Analysts estimated that the country's actual growth would reach a range of 6.1 to 6.3 percent this year as recovery in the global economy would run slowly.But he estimated that that growth would be vibrant next year, may reach up to 6.5 percent."Indonesia's economy would be better next year due to the conduction of general elections that would spur domestic consumption," Aldian Taloputra, economist at state-run Bank Mandiri said.Indonesia's Development Planning Minister Armida Alisjahbana said earlier this month that the government has set growth target next year at a range of 6.4 to 6.9 percent with inflation targeted at 4.5 percent plus minus 1 percent.