Bombings won't harm Indonesia's growth: TM

The attacks that killed nine people and injured at least 53 others shattered four years of peace in the world's largest Muslim-majority democracy, where President Susilo Bambang Yudhoyono won a second five-year term after improving security and pledging to boost spending to help achieve 7 percent annual economic growth.

“Based on past experiences, post bombing the impact is usually on tourism and travel,” Pangestu said in an interview with Bloomberg Television in Singapore today. “On investment and exports, in the past, there has not been a big effect.”

Indonesia's economy grew 4.4 percent in the first quarter from a year earlier, compared with a 6.2 percent contraction for Malaysia and Thailand's 7.1 percent slump. The $433 billion economy may expand as much as 4 percent this year, the International Monetary Fund estimates.

The pace of economic expansion may accelerate to between 5 percent and 6 percent in 2010 from about 4.3 percent this year, Finance Minister Sri Mulyani Indrawati said in a presentation to parliament last month.

Southeast Asia's biggest economy cooled in the months following the October 2002 bombing in Bali, which killed 202 people. Growth eased to 4.75 percent in the quarter ended December 2002 from 5.2 percent in the previous three months, as tourism revenue for the year dropped 20 percent to $4.3 billion.

The pace of expansion also weakened in the wake of the August 2003 assault on the JW Marriott hotel in Jakarta and the second Bali bombing in October 2005, which saw a halving in the number of tourist arrivals on the island.

Indonesia's foreign tourist arrivals may drop 14 percent to 5.5 million this year from a record 6.4 million last year after the Jakarta bombings, slashing revenue to $5.5 billion this year from $7.4 billion, Tourism Minister Jero Wacik said on July 18.

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