Indonesia sees 5.5 pct GDP growth in 2016 with stronger rupiah

Indonesian President Joko Widodo said here Friday that the country's economy is expected to grow faster at 5.5 percent next year with a stronger rupiah, the local currency.

Although the forecast is below an initial projection of 5.7 percent, it is faster than the latest government outlook of 5.0 to 5.2 percent for next year and 5 percent for this year.

Indonesia's economy grew in the slowest pace in six years at the first and second quarters, 4.71 and 4.67 percent respectively, as the government slowed spending amid subdued exports.

The faster growth target next year is in part supported by higher government spending, which is estimated to grow by 6.9 percent to 2,121.3 trillion rupiah (some 154.131 billion U.S. dollars) next year, President Widodo told lawmakers at his annual speech ahead of the anniversary of the Independent Day, which falls on Aug. 17.

The state budget deficit is estimated to rise to 2.1 percent of the GDP in 2016, compared with 1.9 percent in 2015, he said.

The value of the rupiah is also lower than the previous estimation of 12,500 against the U.S. dollar. The rupiah was traded at 13,763 on Friday.

President Widodo unveiled that inflation is estimated at 4.7 percent next year, lower than the initial forecast of 5 percent and oil lifting (after sold) is at 830,000 barrels per day, higher than the previous projection of 825,000. Endi