Indonesia's economy grows at fastest rate since 2004

cars in Indonesia Car sales, seen as an indicator of consumer demand, were up in 2010

Indonesia's economy grew at its fastest annual rate for six years in 2010, driven by consumer spending and investment.

Gross domestic product was 6.1% higher in 2010 than in the previous year, the statistical office said.

Growth was given an unexpected boost in the final three months of the year, figures showed.

Analysts said the speed of growth may lift inflation at a time when high food prices were already hurting consumers.

Last week the central bank raised interest rates for the first time in two years in an attempt to slow price growth.

Indonesia's main cost of borrowing rose a quarter of a percentage point to 6.75%.

Higher rates?

Analysts said that the better-than-expected GDP figures may increase calls for interest rates to rise further in coming months, not least because they also expect economic growth to continue.

Helping drive growth will be steady consumer spending and companies investing in their businesses to fund expansion.

"Growth in first quarter this year will be positive amid soaring inflation as many companies will spend capital for investment purposes," said Eric Sugandi, an economist at Standard Chartered Bank.

More Business stories

RSS

Features

  • Shinji Mikamo's father's watchTime peace

    The story of the watch that survived Hiroshima


  • A man hangs a Catalan flag at his balcony near Barcelona in 2013Caledonia homage

    Who are the Europeans with an eye on the Scottish referendum?


  • Elephant Diaries - BBCGoing wild

    Wildlife film-makers reveal the tricks of the trade


  • Hamas rally in the West Bank village of Yatta, 2006Hamas hopes

    Why the Palestinian group won't back down yet


  • A woman dining aloneTable for one

    The restaurants that love solo diners


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.