IMF sees Indonesia 2007 GDP growth above 6 pct, 6,5 pct next years

Jakarta (ANTARA News) - The International Monetary Fund expects Indonesia's gross domestic product (GDP) growth this year to beat the Fund's initial projection of 6 percent, given strong exports and rising levels of direct investment, IMF Indonesian representative Stephen Schwartz said.

"Our (initial ) projection was 6 percent. Based on recent trends, we do see some upside potential, in particular as a result of the strong export growth and if investment picks up faster than our baseline projection in the second half," Schwartz told Thomson Financial.

"I think the government's more ambitious target of 6.3 percent should be achievable," he said.

Schwartz said he expects the Indonesian economy to grow at between 6.5-7 percent over the next few years, supported by rising exports and investments, and lower inflation levels.

Schwartz said he expects consumer price inflation to "finish well within Bank Indonesia's range of 5 to 7 percent this year."

He said benign inflation and the downtrend in the central bank's benchmark interest rate, which currently stands at 8.25 percent, are positive signs for the economy.

"Lower inflation (and easier rates) is an encouraging development because it will stimulate corporates to borrow more and boost consumer sector growth.