Indonesian president Susilo Bambang Yudhoyono. (Photo: Flickr/Johannes Christo)

Indonesian president Susilo Bambang Yudhoyono. (Photo: Flickr/Johannes Christo)

The government is forecasting an economic growth rate of 5.5 percent next year, up from 4.3 percent expected by the end of this year, official says.

Chatib Basri, an adviser to the finance minister, said Friday the government had set an optimistic target given the positive economic performance this year.

“Barring any political turmoil, the target is very feasible,” he said.

Chatib added that inflation rate would reach about 6 to 7 percent in 2010 assuming that the rupiah currency was stable at 9,800 against the US dollar.

“With these targets, the SBI [Bank Indonesia Certificate] interest rate will reach about 8 percent,” Chatib said.

Next year’s economy will also receive a boost from the export rebound after significantly declining by about 15 percent in the middle of this year, he said.

“Exports have begun to recover but still at a slow pace. The global economic crisis has eased but it takes time to impact on investment and export rates,” Chatib said.

He said export’s negative growth would remain possible, but at a lower rate. “Exports will drop by only about 10 percent [by the end of 2009],” Chatib said.

Unlike exports, the investment rate has regained ground and demonstrated positive growth. “Investment is already going up, albeit slowly. We expect a 4 percent investment growth this year,” he said. –JP