Senior World Bank (WB) economist Jim Brumby has predicted that theIndonesian economic growth will slow to 5.3 percent this year as itstill faces a number of challenges involving uncertain investmentlevels, high interest rates and declining export.

Whileglobal growth has shown positive signs, Indonesia is facing terms oftrade which remain unchanged, higher interest rates and policyuncertainties, Brumby said at a recent press conference in Jakarta.


Hefurther explained that its latest challenge relates to a ban on rawmineral export which has stoked uncertainty among long-term investorsand put more burden on the state budget.


The WB projectedthat the ban will have a negative impact of 12.5 billion USD on nettrade and 6.5 billion USD worth of losses in fiscal revenues from exportand income taxes for the next three years.


It suggestedthe Indonesian government reform policies in support of economic growthwhich hit 5.78 percent last year, adding that it should adjust fuelprices to reduce the burden of energy subsidies which were predicted toincrease to around 2.4 percent of gross domestic product (GDP), up from2.2 percent of the GDP in 2013.


Bank Indonesia (BI) hasrevised the country’s 2014 economic growth outlook to between 5.5 and5.9 percent from an earlier forecast of between 5.8 and 6.2 percent.


Last year, Indonesia attracted over 35 billion USD of investment.-VNA