From Government of Indonesia

Economy Grew 6.5% in Q4 2006

Indonesia's economy expanded 6.5% in the fourth quarter of 2006 from a year earlier on rising consumer spending, Bank Indonesia (BI) said Tuesday (30/1/07), according to Bloomberg News.
It was the fastest growth since December 2004, the central bank said in a report published on its website. Growth was 5.5% in the third quarter.

President Susilo Bambang Yudhoyono expects the $351 billion economy to expand more than 6% this year from 5.6% in 2006.
Household consumption is expected to grow 4.3% in 2007 after growing 3.1% in 2006, BI said. It also said increased economic activity might occur in the second half of 2007, marked by a significant increase in private investment.

Rising investment is expected to trigger 18% growth in bank lending this year, while macroeconomic stability and falling interest rates will likely also encourage companies to raise funds from local capital markets, the central bank said, according to Dow Jones Newswires. Government spending is expected to increase 11.6% this year,

Indonesia's exports will grow a mild 8.3% this year amid the expected decline in world trade volume, BI said, while rising economic activity at home is expected to lead to a 10.5% increase in imports this year.

Separately, the government bought back Rp5.9 trillion ($648 million) of bonds due between 2008 and 2012 and sold the same amount of longer-term debt to reduce interest costs, a Finance Department official said.

The government sold 10.25% bonds due in 2027 at a yield of 10.524%, the department said, adding investors submitted bids of Rp9.11 trillion for the debt on offer.

The government last swapped debt on January 9, when it repurchased Rp1.56 trillion of short-term notes and sold the same amount of securities due in 2025.
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