The International Monetary Fund (IMF) has forecast Indonesia's economy to grow by 6.4 percent this year, lower than the government target of 6.5 percent, suggesting the nation may yet be ensnared in the economic woes that have afflicted much of the world, local media reported on Thursday.
Rupa Duttagupta, the deputy head of the IMF's world economic studies division was quoted by the Jakarta globe as saying that while Indonesia's economy was supported by strong domestic demand, the country would not necessarily be spared from "potential negative spillovers from the external side," referring to the deteriorating global economy, which may sap demand for exports.
The downward shift for Indonesia was part of a lowering of growth expectations across the world.
The fund slashed its forecast for the world's economic growth for this year and next to 4 percent and warned of "severe" consequences if Europe failed to solve its debt crisis or the U.S. faced a new deadlock over spending.
For next year, the IMF forecast Indonesia's economy to grow by 6.7 percent.
The IMF earlier penciled a global growth rate of 4.3 percent this year and a 4.5 percent for 2012.
The IMF also predicted that Indonesia would not achieve a growth rate of 7 percent until 2016, two years later than the target set by President Susilo Bambang Yudhoyono.