YEAR-ENDER: CONTINUED ECONOMIC GROWTH SEEN FOR RI IN 2011 BY ANDI ABDUSSALAM

Jakarta, Dec 20 (ANTARA) - Indonesia's economy is expected to continue improving in the coming years with economic growth predicted to increase from 6.0 percent this year to 6.5 percent in 2011, and eventually reaching over 7.8 in 2015.

"The prospect of the Indonesian economy next year will be better than previously projected," Coordinating Minister for Economic Affairs Hatta Rajasa said in Riau province on Sunday.

The chief economic minister predicted that Indonesia's economy would grow by 6 percent this year and 6.5 percent in 2011, citing global economic recovery as one of the factors that would contribute to Indonesia's economic performance.

The same opinion on better economic prediction next year was also expressed by economist Anggito Abimanyu. But he predicted a moderate growth rate increase to 6.3 percent.

He said that the country's economic growth is predicted to be higher than 5.9 percent predicted in 2010 but also with a higher risk because Indonesia is located in a natural disaster-prone region.

The former economic vice minister said Indonesia sits on a region where 22 volcanoes are still active and therefore a better risk management would be needed especially insurance for people living around the mountains.

"We need to add natural disaster dimension to the Indonesian economic risks because 22 volcanoes are still active," he said in a seminar on "Economic and Industry Outlook 2011 recently.

Anggito predicted the inflation rate next year would be less than five percent but the rate could continue driving foreign investors to come to the Indonesian market if Bank Indonesia continues to maintain its reference rate at 6.5 percent.

Therefore, Minister Hatta Rajasa is upbeat about the country's economic performance years ahead. "The prospect of the Indonesian economy will be better than previously projected," he said.

Citing Bank Indonesia data, Hatta Rajasa said that the Indonesian economy would grow 6.0 percent in 2010 and was expected to grow 6.5 percent in 2011.

After all, the Indonesian people's per capita income has also been improving. "At the end of this year, the per capita income will already reach 3,000 US dollars. This figure has already been beyond the target of the government," he said.

By 2030, Indonesian per capita income would be 17,000 US dollars. This projection was based on the robust Indonesian economy that sustained a consistent growth.

In addition, domestic demands are strong. The positive circumstances of the Indonesian economy have also partly been influenced by the recovery of the global economy as reflected by the growth in export since the fourth quarter of 2009.

According to Bank Indonesia (BI) or the central bank, exports of goods and services are predicted to grow 11.4 - 12.4 percent in 2010, 8.2 - 9.2 percent in 2012, 8.4 - 9.4 percent in 2013 and 10-11 percent in 2014.

The BI has projected that the Indonesian economy will grow at a 6.8 - 7.8 percent pace in 2015 with the inflation rate tending to decline and fundamental factors continuing to improve.

The most important fundamental factor is that capital growth has returned to normal after the 2008 global economic crisis and the government's corrective measures on the structural side to speed up efforts to increase productivity and economic efficiency, the central bank said in its 2010-2015 Indonesian economic outlooks.

On the encouraging economic prediction, Indonesia is also expected to emerge as a new economic power. Its national economic growth is viewed as having that potential.

"Indonesia has a good prospect and economic potentials. It can emerge as one of the world's economic powers," Ginandjar Kartasasmita, member of the Presidential Advisory Council (Watimpres), told a discussion in Bogor, West Java, early this month.

He said that Indonesia's economic prospect and big potentials would turn it into a new economic power in the world. "Ahead, Indonesia's economic growth should hit a two digit figure, or over 10 percent," Ginandjar, who held a number of important positions during the New Order government, said.

He said that during the New Order government the economic growth was always recorded over 7.0 percent. During the reforms era, Indonesia has not yet been able to reach a seven percent growth rate.

But he was confident that with potentials and big assets in hand, Indonesia will be able to reach an economic growth of over two digits in the future.

Ginandjar's confidence over Indonesia's economic prospect was shared by Minister Rajasa. He said that Indonesia's economy has been on the 16th place in the global economic ranking, above the previous projection.

He admitted however that the good development on the economic sector had not yet positively given impacts on the poverty reduction in Indonesia.

"Therefore, there should be a way out to deal the with poverty issues, something that must be made a home work not only for the central government but also for the regional governments," he said.