Jakarta (ANTARA News) - Bank Indonesia (the central bank/BI) has predicted the Indonesian economy will expand by a range of 6.0-6.5 percent next year on the back of improving global and domestic economy.
Domestic consumption would remain strong and export performance would increase along with the global economic recovery, Bank Indonesia Governor Darmin Nasution said here on Tuesday.
The rising foreign investment inflows in line with strong domestic and global demand would also contribute to the economic growth next year, he said.
The 2011 economic growth forecast is higher than the economic growth forecast of 6.0-6.3 percent for this year and is well above the assumed economic growth of 6.4 percent set in the draft 2011 state budget.
Darmin said the economy grew 6.2 percent until the second quarter of 2010. In the third quarter alone, the economy expanded 6.3 percent, fueled by strong consumption, export performance and investment inflows.
At its meeting on Tuesday, the BI Board of Governors noted that higher-than-expected demand, weather anomaly expected to continue until next year, and planned increase in the administered prices of goods would push up inflation rate.
The central bank kept monitoring the potential inflationary pressure and increased its coordination with both central and regional governments, he said.
He said Bank Indonesia noted that inflationary pressure related to consumer price index (IHK) until September still originated from volatile foods. IHK inflation in September reached 0.44 percent month-on-month or 5.80 percent year-on-year.
Bank Indonesia on Tuesday decided to keep its key rate at 6.5 percent for the thirteenth straight month.
"The current BI Rate is still relevant to the inflation target and remains conducive to financial stability. It can also encourage the banking industry to carry out an intermediary function so the supply side can adequately respond to accelerated demand side," he said. (*)