Tuesday, March 9, 2010
UBS: RI Economy to Expand by 6 Percent in Two Years
Source: The Jakarta Post
Aditya Suharmoko

Swiss-based bank UBS estimates that Indonesia's economy will expand by 6 percent in the coming two years, leading to a stronger rupiah against the US dollar, UBS economist Edward Teather said Tuesday.

"We forecast Indonesian real GDP growth to perform well in a global and ASEAN context, growing at 6 percent in 2010 and 2011," he said.

"On a trend basis we suspect the economy should achieve at least 5 to 6 percent real GDP growth in the context of a de-leveraging global economy, higher than our model suggests because of still-rising savings and investment to GDP. Because of this, we expect an ongoing real appreciation of the rupiah."

UBS says its greatest concern with Indonesia's economy is overconfidence as the stock market index historically loses a point every time a data release is below consensus expectations.