Posted on 16 Dec 2008
Indonesia`s industrial growth is expected to reach only 3.6 - 4.6 percent in 2009 as the country`s economic growth was projected to drop to 4.5 - 5.5 percent, Industry Minister Fahmi Idris said.
"The drop in economic growth will affect industrial growth in 2009," he said at a meeting with the House of Representatives (DPR)`s Commission VI.
He said the government had revised its industrial growth target for 2008 from 5.8 percent to only 4.8 percent.
He said the current global financial crisis had caused a decline in industrial product exports, credit expansion and people`s buying power that slowed industrial expansion and growth.
Several industrial branches that had that had their growth targets revised were textile and textile products, transport means, machinery and equipment, fertilizers, chemicals, rubber-based products and wood- as well as forestry-based industries.
To support national industrial growth in the current crisis the government would promote industrial product exports by providing various facilities and incentives and maintaining its export market access.
For the past three years Indonesia`s exports still showed an increasing tendency at a rate of around 15.4 percent a year. In 2008, however, its export performance began to fluctuate and show downward trend.
The global financial crisis had lowered demand in the country`s main markets such as the US, Japan and the European Union. The situation would tighten competition to the country`s products particularly textile and textile products, rubber, wood, pulp, paper, palmoil and metal products.
"Industries which were initially expected to expand now appear to have decided to postpone their expansion plans," he said.
Some industries predicted to postpone their expansion plans were steel, cement, petrochemical, footwear, automotive and automotive sparepart industries, Idris said.
