Observer : Critical point in economic downturn now passed 

            Chief economist of state-owned Bank Mandiri, Mirza Adityaswara, said the critical point in the economic downturn had been passed and therefore the country`s economy had now started to improve. "It is believed the crisis has already reached the bottom and hopefully the worst period has passed," he said at a press conference on economic outlook for 2009 here on Tuesday.

            He said several data had shown indications showing that the country`s economy remained strong. He said the central bank`s prediction that the country`s economy had grown 4.6 percent in the first quarter was a good news for the market because it earlier forecast that it would grow below four percent or around three to four percent. "This means we are still strong," he said.

            Besides that, the country`s economic performance in March was also recorded improving compared to that in February, as shown by increasing auto sales and properties. He said according to the Association of Auto Industries (Gaikindo) car sales in March 2009 rose 1.1 percent compared to February`s sales (month-to-month). Sales of motorcycles meanwhile also increased five percent in March compared to February.

            According to Ciputra Group sales of houses across Indonesia have also risen. In March total house sales reached Rp252.572 billion while in January they reached only Rp57.536 billion and in February Rp52.653 billion. Cement sales meanwhile rose one percent in March reaching 2.951 tons compared to February`s sales.

            He said the drop in sales of heavy equipment meanwhile was flat. According to United Tractor sales of heavy equipment in March reached 189 units or lower than 218 recorded in February or 216 recorded in January.

            The drop in garment sales was also flat. According to data from Ramayana clothing sales in January reached Rp336.5 billion. It dropped to Rp291.6 billion in February but rose again in March to Rp346.5 billion.

            Mirza said the critical period in the financial sector had also been over, as shown by smooth liquidation of Bank IFI recently. "If it happened in the fourth quarter of 2008 it would certainly cause large-scale transfer of funds from small banks as a result of panicking," he said.He said he predicted the country`s economy would grow 3.8 percent this year.

            Economic minister`s special staff Chatib Basri however said he could not as yet believe that the impact of the world crisis had reached the bottom. "Right now influence from overseas is still strong. If globally it drops we will also be affected. Until now noone can predict future global economic conditions," he said. He said improvement in some indicators was a mere effect of fiscal policy. "Income tax exemption as stimulus has had its effect and so consumption remains quite strong," he said. He said that although infrastructure stimulus did not work economy would still grow positively. "It would be around three to four percent if infrastructure stimulus does not work," he said. He predicted the decline in economic performance could still be felt in the second and third quarters.