"Consumption and investment will remain strong like in the previous three quarters when they contributed 6.5 percent to the growth," ADB chief economist Edimon Ginting said.Jakarta (ANTARA News) - An Asian Development Bank (ADB) official predicts the Indonesian economy will grow 6.6 percent this year, fueled by domestic consumption and investment.
"Consumption and investment will remain strong like in the previous three quarters when they contributed 6.5 percent to the growth," ADB chief economist Edimon Ginting said here on Thursday.
The 6.6 percent economic growth could be achieved if the economy grew 6.7 percent in the fourth quarter, he said.
To achieve the growth, he said the government needed to significantly raise its spending like in the previous year while at the same time maintaining the exports` performance.
"Until the third quarter the support of government spending was still very marginal due to a delay in the execution of capital spending," he said.
Edimon predicted the inflation rate would not go up until the end of this year and could be kept in check at 4.4 percent year-on-year.
"If inflation in the last two months is the same as that of last year when monthly inflation reached 0.6 percent in November and 0.9 percent in December, the inflation rate in 2011 is predicted to stay at a level of 4.4 percent," he said.
He said inflation rate was most likely to increase in the last two months of 2011 due to the execution of government spending at the end of this year.
If monthly inflation rates in November and December 2011 were lower than those in the same period last year, the yearly inflation might fall short of the target of 5.65 percent set in the 2011 state budget, he said.
"A decline in inflation rate to a lower level still depends on inflation rates in the last two months of 2011," he said.(*)
Editor: Heru Purwanto
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