This fourth-quarter growth pace would be among the highest in Southeast Asia, he said at the State Palace.
Other countries in the region, including Singapore, have seen contracting economies as the debt crisis in Europe and slow economic growth in the United States have undermined demand for their goods. In Indonesia, on the other hand, annual economic growth of 6.5 percent in 2011 marked the fastest rate since before the 1997 financial crisis.
Private consumption typically accounts for two-thirds of Indonesia’s gross domestic product, while overseas sales or exports account for about 27 percent.
Analysts and economists said weak demand from US and European customers would not have a big effect on Indonesia’s economy, but that the government needed to invest more in roads, airports and seaports to boost economic growth.
“We have not seen any bold efforts by the government to boost infrastructure development,” said David Sumual, chief economist at Bank Central Asia, the country’s largest lender by value. “Government spending is still weak.”
The Central Statistics Agency (BPS) is expected to announce fourth-quarter gross domestic product data in February.
The president also said on Monday that the nation’s gross domestic product may have risen to $820 billion last year from $710 billion in 2010, while the BPS announced that inflation slowed due to stable food prices.
Elsewhere, Yudhoyono said the budget shortfall last year was 1.27 percent of gross domestic product, or Rp 90.1 trillion ($9.91 billion). That shortfall marked a narrowing from the original forecast of 2.1 percent of gross domestic product.
Analysts in Jakarta attributed Indonesia’s strong economic growth in part to low borrowing costs. The nation’s central bank, which cut its policy rate by 75 basis points in October and November, kept the key rate at 6 percent in December to maintain economic growth.
Source: The Jakarta Globe - January 3, 2012