However, the property market has not been affected as much as the general economy, with companies like Lippo Chikarang even adding projects to their rolls which could boost revenue by as much as 40%.
High oil prices are beginning to have their effect on the global economy. The Jakarta Post reports that the government intends to begin acquiring more foreign loans in order to cover the states budget deficit. The state's deficit is expected to grow as the global economy begins to slow down. The budget deficit was recently revised and increased from 1.7 % up to 2 % of the predicted GDP. Overall the economy is expected to grow, but at a slightly slower pace then previously expected. Many are starting to feel the strain of high oil prices. On Wednesday, oil prices reached a record high of $101.32 per barrel.
Lacking the major tourism market, consumption is the main driving force behind the economy, and it is expected to decrease slightly. However, this does not mean that the poverty rate will necessarily increase. In an effort to stimulate the economy, the government is expected to eliminate import duty tax on soybeans as well as the value-added taxes placed on flour, wheat and cooking oil. Rice a cheap food source will also be provided to the nation's poor.
Real Estate Developer Lippo Cikarang has development plans in the work that may help to keep the property market from slowing down much over the next year with the rest of the economy. The company plans to construct and sell about 800 new houses this year. So far the company has built over 8,000 houses which are priced to appeal to low and middle income buyers. Of the 3,000 hectares of land available, between one and two thousand remain vacant. Lippo Cikarang is not confining its efforts to residential properties, but is also expecting to develop several industrial complexes. The expected revenue from home sales is expected to boost Lippo Cikarang's revenue by 40%.
