Manufactured Foods Producers Optimistic Economy To Grow

Jakarta, May 17 (Antara)- Indonesian economy would grow this year, sustained by domestic sector though not as fast as recorded in the past several years, an economic observer predicted. In the first quarter of this year , the country`s economy grew 6.02 percent lower than the government target of 6.8 percent. Eddy Sutanto, a commissioner of food manufacturing company PT Asafood (Asa Foodenesia Abadi) described as fairly good the Q1 growth despite the shortfall. "The economy growing by more than 6 percent is quite good compared with other countries` performance," Eddy said in a statement here on Friday. He said the government should maintain the growth above 6 percent, adding a growth of below 6 percent would give a bad signal. "We are optimistic the government could keep the economic growth at a strong level," he said. He said Indonesia remains a potential market attracting many foreign investors to do business in the country. "Foreign investors have been more optimistic in venturing in Asia including in Indonesia," he said. He said inflation of 7-8 percent is still safe for the country but it should not be allowed to cross the 10 percent level. "Two digit inflation would trigger an increase in bank interest rates," he said. PT AsaFoods President Andreas Sutanto said his company was not worried too much even if banks raised their interest rate as it already has enough stock of basic material in imported wheat grains. "We have enough stock available to feed our factory and keep the process of production going," Andreas said. He said his company is optimistic it would reach its income target of Rp100 billion this year. He said he did not believe banks would raise their interest rates especially as the central bank has no plan to raise its benchmark interest rate (BI rate) . Bank Indonesia still maintained its BI rate at 5.75 percent. Meanwhile, PT Belanja Makanan Indonesia (BMI),another food manufacturer, said it plans expansion by opening 60 new outlets in the Greater Jakarta area until the end of this year. BMI Chief executive officer Mozes Latuihamallo said demand for its food products is growing on improved purchasing power of the people. Currently BMI has 18 outlets in Jakarta and new stores would be open in the Greater Jakarta areas mainly in housing complexes and public places. He said food manufacturing industry notably bakeries recorded a 15 percent growth in income to Rp31 trillion in 2012 from the previous year. The rise in the prices of LPG and electricity , and labor cost and planned increase in oil fuel prices would pose a big challenge for the industry , but it is expected to continue to grow, he said.