Wed, 09 Nov 2011

Jakarta (ANTARA News) - The domestic economy will grow by up to 7 percent in the next few years if investment in infrastructure development increases, National Development Planning Minister Armida Salsiah Alisjahbana said.

"Although infrastructure investment is going down, the economic growth remains above 6 percent, fueled by strong domestic consumption," she said in a written statement issued on Tuesday.

Armida who is also chief of the National Development Planning Agency (Bappenas) said investment in the country`s infrastructure development at present was far lower than in the era of the New Order regime.

During the New Order regime, investment in infrastructure development accounted for 7 percent of the gross domestic product (GDP), with the state budget contributing 2.0 percent, regional budget 2.5 percent, state-owned companies 2 percent, and private companies 2 percent, the BPS deputy head for balance sheet and statistic analysis, Slamet Sutomo, said.

Currently, infrastructure investment accounts for 4 percent of the GDP, or lower than the ideal rate of at least 5 percent.

Therefore, the minister said sustainable infrastructure investment was needed to increase the national competitiveness by among others encouraging state and private companies to realize the Master Plan for Acceleration and Expansion of Indonesian Economic Development (MP3EI).

Earlier, the Central Statistics Agency (BPS) said the domestic economy grew 6.5 percent until the third quarter of 2011, fueled by the processing industry and the trade, hotel and restaurant sector 1.7 percent respectively, the financial, transportation and communication sectors 0.9 percent.

Meanwhile, the real estate, corporate service and services sectors contributed 0.7 percent each, and the construction, agricultural, husbandry, forestry and fishery sectors 0.4 percent each to the economic growth.

On a yearly basis, the trade, hotel and restaurant sector grew 10.1 percent, the transportation and communication sector 9.5 percent, and the service sector 7.8 percent compared to the same period a year