Indonesia Growth Likely Near Southeast Asia’s Fastest

LAMPUKUNING-INDONESIA'S economy probably grew at close to the fastest pace in Southeast Asia as higher commodity prices boosted rural incomes and a strife-free presidential election buoyed consumer spending and investment.
Gross domestic product expanded 3.8 percent in the second quarter compared with a 4.4 percent gain in the previous three months, according to the median forecast of 17 economists in a Bloomberg News survey. The statistics bureau is due to release the figures after 11 a.m. in Jakarta, Monday (10/8).
Indonesia has avoided the recession that hit many of its Asian neighbors this year as its economy’s main driver is domestic demand rather than exports. President Susilo Bambang Yudhoyono said in his budget speech last week that growth is expected to accelerate to more than 5 percent in 2010 and “even faster” in subsequent years.
“Strong commodity prices are benefiting small-scale farmers and miners,” said Wai Ho Leong, senior regional economist at Barclays Capital in Singapore. “The urban population has been spared the worst of the financial turmoil, given that major employers such as banks and companies are generally in good shape. So things are still humming along.”
Consumer confidence in Indonesia jumped in July to the highest level since December 2004, the year Yudhoyono first took office. The seventh straight monthly increase in an index of consumer confidence compiled by the central bank was partly due to July’s peaceful presidential election, Bank Indonesia said. [aloysius unditu/bloombergcom]