DAVOS: Indonesia's export growth is likely to come to a halt this year, hurt by falling demand from the euro zone, but the economy will probably remain resilient because of its reliance on domestic consumption, the country's trade minister said.
Gita Wirjawan, in an interview with Reuters on the sideslines of the World Economic Forum in Davos late on Friday, also said any further monetary easing by the US could lead to a spike in commodities prices, hitting developing economies.
"We had a record year in 2011 in terms of exports at about $205-$210 billion," Wirajan said. "If we can just maintain the $205 billion figure for 2012, that will be an achievement already given what's happening in western Europe and the US"
Wirjawan's forecast for flat export growth is weaker than his previous outlook of single digit percentage growth, and also down from the 33 percent he said Indonesia recorded in 2011.
Indonesia is the world's largest exporter of thermal coal, tin and palm oil, and a leading exporter of coffee, cocoa, rubber and metals such as copper.
"We are making a concerted effort to diversify out to new markets, inclusive of Africa, where 7 of the 10 strongest economies for the past decade have been," he said.
Southeast Asia's largest economy saw strong portfolio investment last year, but the eurozone debt crisis and worries about global conditions led some investors to rebalance assets in emerging economies, hurting the rupiah currency and erasing most of the stock market's strong earlier gains.
Exports currently account for about a quarter of Indonesia's GDP, with domestic consumption making up for over half of its economy and making it less exposed in case of a slowdown in global trade. By comparison, exports account for about 200 percent of neighbouring Singapore's economy.
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