Intellasia News Services -- Bank Indonesia raises 2010 growth forecast to 5.6pct

Bank Indonesia raises 2010 growth forecast to 5.6pct
Source: 10-MAR-2010 Intellasia | Bloomberg
10 Mar, 2010 - 7:00:00 AM
Indonesia's central bank raised its estimate for economic growth this year to 5.6 percent from its original forecast of 5.2 percent, deputy Governor Hartadi A. Sarwono said in an e-mail today.

The growth forecast for the first quarter was also raised to 5.7 percent from 4.8 percent, he said. He didn't elaborate.

Indonesia fared better than its neighbours during last year's global slump as it relies less on exports and consumer confidence has been buoyed by the most stable political climate since the ouster of former dictator Suharto in 1998. The country's economy expanded 4.5 percent last year.

"Private consumption is forecast to grow higher in the first quarter," Bank Indonesia said in a statement published on its Web site on March 5. Private consumption accounts for about 68 percent of Southeast Asia's largest economy.

Indonesia's inflation rate may average between 4 percent and 6 percent this year compared with an average 2.78 percent in 2009, the central bank has said.

Bank Indonesia kept its benchmark interest rate unchanged at 6.5 percent on March 4, the lowest level since the measure was introduced in July 2005.

Separately, Finance minister Sri Mulyani Indrawati said today the government's 2010 budget deficit is forecast to widen to 2.1 percent of gross domestic product, or 129.8 trillion rupiah ($14.1 billion), from a previous estimate of 1.6 percent of GDP, or 98 trillion rupiah.

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