Global crisis to slow local growth - Indonesia's central bank
Indonesia's central bank
predicted the financial crisis that is rippling out from the United States to
the rest of the world would shackle Indonesia's economic growth and cause a
credit shortage for local business players, media reports said Monday.
"The shortage of global liquidity will be felt as a result of this crisis," said .Boediono, governor of Bank Indonesia, reports dpa.
"We must be prepared to face this over the next six months to one year," The Jakarta Post quoted Boediono as saying.
Boediono, who like many Indonesians uses only one name, made the remarks after attending a meeting with economic officials Sunday to discuss measures on how to deal with the negative impact of the global liquidity crisis.
He forecast that the global liquidity shortage would only stabilize once developed economies were on a safer footing.
Another development needed to bring the liquidity crisis to an end, Boediono said, is the recapitalization of assets that have been abandoned by investors.
"We will strengthen the banking sector," the governor said. "Our target is to maintain sustainable lending growth that can support acceptable economic growth and controllable inflation."
Meanwhile, Vice President Jusuf Kalla said the impact of the crisis would certainly not be as substantial on Indonesia as on countries such as China and India, which are large exporters to the United States.
"All countries would be affected, so the question is to what extent," Kalla was quoted as saying by the state-run Antara news agency. "The impact varies with each affected country, and I believe the impact on Indonesia will not be as strong as that on other countries."