ADB revises up Indonesia's growth outlook

The Asian Development Bank (ADB) has lifted growth forecast for Indonesia to 5.7 percent from an earlier forecast of 5.5 percent as a revival in investment helps bolster the country's economy, the bank said in a statement Thursday.

"The investment pickup, from a low base, follows the relatively seamless transition to a new government after elections in 2004, and expectations of greater regulatory certainty and a recovery in infrastructure spending," it said.

However, the bank warned that a burgeoning oil subsidy bill could yet jeopardize prospects.

Indonesia's gross domestic product rose 5.9 percent in the first half of the year, fueled by a 13.6 percent expansion in fixed capital investment.

The higher investment was a major reason for a 35.4 percent jump in imports, as businesses bought more capital equipment and production materials overseas, it said.

Exports grew by 27.5 percent, partly as a result of higher prices for shipments of oil and natural gas. The trade surplus rose to 12.2 billion US dollars in the first half of the year.

Source: Xinhua