Indonesian Economy 3rd quarter 2010 Lost Momentum at Last Quarter
Wednesday, December 15, 2010
Indonesia's economy fell just short of the estimated growth rate. Predicted to reach over 6 percent, the economy fared unsteadily at the end of the quarter and only grew by 5.8 percent, caused by a drop in agricultural performance following harvest failures and extreme weather. Food prices soared. Inflation ran high. The situation was worsened by limited electricity resulting from minimum new infrastructure. Government expenditure, normally involving large amounts, was less intense. The weak budget absorption led to less optimal development and contributed to the lack of liquidity on the financial market. Consequently, the initial economic revival was restrained. The momentum for greater strides was unnecessarily wasted.
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Restrained Growth
The rising trend of the Consumer Confidence Index, which had declined due to food price hikes, was again held back as a result of harvest failures in several regions. The CCI dropped in nearly all segments, especially in rural communities, which were wary of incurring losses posed by extreme weather. Confidence in the government's ability to maintain price stability also faded. Growth slowed by the end of the third quarter. The s
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