Rising investment seen pushing economic growth

JAKARTA (The Jakarta Post): Rising investment and an in-check inflation rate are seen pushing Indonesia's economy toward the 6.3 percent growth targeted by the government for the year.

The Investment Coordinating Board (BKPM) reported last week that actual foreign direct investment (FDI) had by the end of September nearly doubled to US$8.54 billion -- mostly in the transportation and communications sectors -- from $4.29 billion in the same period last year.

The BKPM noted a more than threefold rise in FDI approvals to $33.03 billion during this period, mostly in the chemical industries, while domestic investment approvals increased 58 percent to Rp 171.46 trillion.

The Finance Ministry highlighted stronger investment and higher consumption in its latest assessment of the economy last week, seeing both as providing the stimulus for faster growth of between 6.2 and 6.4 percent year-on-year for the three months to September -- slightly higher than the 6.3 percent growth registered in the second quarter.

The government expects Indonesia's economy to grow by an overall 6.3 percent for 2007, and faster still at 6.8 percent next year. The economy grew by 5.5 percent last year, slightly lower than 2005's 5.6 percent. (Urip Hudiono)