RI economic recovery on track

Aditya Suharmoko, The Jakarta Post, Jakarta | Mon, 01/18/2010 11:41 AM

Indonesia's recovery is on track, and the economy is estimated to expand 5.5 percent this year and accelerate to 7 percent in 2012, Standard Chartered Bank says.

"Growth this year may accelerate further to 5.5 percent," Gerard Lyons, Standard Chartered's chief economist and group head of global research, said Monday, adding that Indonesia had been a strong performer amid the global recession last year.

Lyons said domestic demand would be the key driver to growth in Asia while exports would likely have a "very weak rebound". He warned that a "combination of capital inflow and firm domestic demand could bring inflation to Asia".

Tai Hui, Standard Chartered's head or research for the Southeast Asia region, said Indonesia's central bank might hike rates earlier than its peers because of accelerating inflation.