Indonesia growth will improve in '07: survey

Indonesia's economic growth is forecast to accelerate in 2007 to more than 6 per cent after clocking in at 5.1-6.0 per cent for this year and 2005, a central bank survey released yesterday showed.

Growth in South-east Asia's largest economy has been expected to be shaved lower after the government hiked fuel prices last October by an average of 126 per cent, and also dramatically tightened monetary policy.

The survey of 94 economists, analysts and economists carried out in the final quarter of last year also predicted that the inflation rate, which has spiked since the fuel price hike, would improve to 7.1-8.0 per cent in 2006.

Inflation for 2005 stood at 17.11 per cent, the highest level since 1998, easing slightly to 17.03 per cent on a year earlier from January according to figures released on Wednesday.

The rupiah was expected to stay in a range of 9,501-10,000 against the US dollar, according to those surveyed.

Factors seen as limiting growth meanwhile were high interest rates, high inflation, inconsistencies in government policies, corruption, unemployment and poverty, they said.

Indonesia's President Susilo Bambang Yudhoyono swept to power in late 2004 pledging to clean up rampant corruption here which has long been seen as a key deterrent of foreign investment and a brake on growth.

Source:
AFP, February 3, 2006