Business Leader Voices Concern Over Deficit In Balance Of Payment

Jakarta, Aug 14 (ANTARA) - A business leader has expressed concern over the deficit in the Indonesian balance of payment that he feared could reach more than US$10 billion by the end of the year to affect the rupiah exchange rate. "The deficit in the second quarter this year already reached US$2.8 billion or more than that of the first quarter which was recorded at only US$1 billion. The deficit has widened due to a bigger current account deficit reaching US$6.9 billion or 3,1 percent of the gross domestic product in the second quarter," the general chairman of the Association of Indonesian Employers, Sofjan Wanandi, said here on Tuesday. The government, he said, has lost its sense of crisis while local products are difficult to compete with imported products that have kept flowing into the domestic market. "If the situation remained like this the deficit in the balance of payment could become higher. The world must be careful with a deficit in the balance of payment," he said. Trade minister Gita Wirjawan meanwhile said that the deficit in the balance of payment was not as yet very concerning as the global economy will recover to bring a positive impact on the Indonesian balance of payment. "The government was optimistic the conditions will improve in the next six months. The European Union has also started to be ready to take a firm fiscal as well as monetary stand," he said. He said the deficit in the Indonesian balance of payment occurred because of increasing imports of raw and supporting materials. "If we wish to curb imports it is certainly for improving the current account that will affect growth. But we increase imports so long as they are limited to raw and supporting materials they will boost growth and open more employment," he said.