The powerful earthquake that hit Indonesia’s Sumatra island this week was seen having a limited impact on growth in Southeast Asia’s biggest economy, as the affected areas contributed less than 3 percent of GDP.
The U.N. said some 1,100 people had been killed in Wednesday’s 7.6 magnitude quake. Thousands more were feared trapped under damaged houses. West Sumatra province was worst affected, with Jambi and Bengkulu provinces also hit.
Following is a summary of the possible impact on trade, inflation, non-performing loans, the budget deficit and growth:
- The government’s GDP growth target of 4.3 percent is seen largely unaffected. The three provinces contributed less than 3 percent of the national GDP.
- The country’s most populous island of Java contributed half of the country’s GDP. Sumatra island contributed about a quarter, but mostly from North Sumatra, Riau and Lampung provinces.
- The three provinces export commodities such as palm oil, rubber and coffee. But their exports accounted for only about 1.9 percent of the country’s total exports in the first half of 2009.
- The quake has damaged some roads and was likely to push up prices in the three provinces. A central statistics bureau official, however, said the areas have small weightings in the calculation of the consumer price index.
- The government has set aside at least 250 billion rupiah ($25.92 million) in initial emergency funds to cope with the quake, Finance Minister Sri Mulyani Indrawati said.
- Local media reported 2.4 trillion rupiah in disaster funds not yet used in the 2009 budget. The amount mentioned by the finance minister indicated that the quake funds were unlikely to push up the 2009 budget deficit, forecast at 2.4 percent of GDP.
- The quake’s impact on non-performing loans was likely to be limited. Outstanding bank loans in the three provinces were at 35 trillion rupiah, or 2.5 percent of total loans in the industry as of July. NPL ratio in the industry stood at 4 percent as of July. ($1=9645 rupiah)
Source : Indonesia’s statistics bureau (www.bps.go.id), Bank Indonesia (www.bi.go.id)
With Reuters
