Asian Development Bank Upgrades Forecasts for Indonesia

The Asian Development Bank raised its growth forecasts for Indonesia on Tuesday, as it did for regional heavyweights China and India, saying the region is leading a global recovery but warning against ending stimulus efforts too quickly. The ADB forecast that Indonesia’s economy would expand 4.3 percent this year, compared with its 3.6 percent estimate in March.

The bank said “robust growth in private consumption, underpinned by easing inflation and a surge in election-related government spending, drove better-than-expected economic growth in the first half of 2009.” The report added that the country’s “fiscal stimulus measures supported growth. Net exports contributed to the expansion as imports contracted faster than exports, though investment weakened. “Relative to forecasts made in March this year, the full-year growth projections are revised up for 2009 and 2010, and inflation will likely be lower.