Indonesia's economy is forecast to grow by about 6.5 percent this year, as exports, investment and consumption pick up, Finance Minister Agus Martowardojo said here on Thursday.
The minister forecast that the GDP to expand by 6.5 percent in the third quarter and slightly above the figure in the fourth quarter, as the government spending normally rises at the last quarter.
"This year our economic growth is targeted at 6.5 percent," Martowardojo was quoted by the biggest portal detik online as saying.
Indonesia's economy expanded by 6.5 percent in the first and the second quarters.
Indonesia's economy has been better prepared to face the risks of possible crisis in the United States and Europe. The economy survived the global financial routs in 2008-2009 by registering 4. 5 percent growth, the third highest after China and India, while other countries suffering from strong contractions. The central bank has refrained from raising interest rate since it raised it by 25 basis points to 6.75 percent in February after keeping it steady for more than two years.
Analysts have said that the bank may continue to keep the rate steady at the third quarter as there is no urgency to raise the rate, saying that the bank may raise the rate at the last quarter.
Indonesia's export in June grew to a record high by 49.35 percent to 18.41 billion U.S. dollars year on year, the National Statistic Bureau announced on Aug. 1. The government has set an export target of 12 percent hike this year to 168 billion U.S. dollars, said Coordinating Minister for Economy Hatta Rajasa.
The capital inflows have trended to park at foreign direct investment rather than portfolio and it is forecast to continue by year end, which is expected to spur growth, the spokesman of the central bank Difi Johansyah said.
The capitals flowing into form foreign direct investment (FDI) rose to 5.25 billion U.S. dollars in the second quarter from 4.79 billion U.S. dollars in the first quarter, while in the form of portfolio, they increased to 6.28 billion U.S. dollars in the second quarter from 4.11 billion U.S. dollars in the first quarter, the spokesman said.
The improving investment climate had pushed more foreign capitals flowing into direct investment since the economic recovery after the global financial routs in 2008-2009, he said.