POLL-Indonesia growth seen hitting 7-yr low in 2009

By Tyagita Silka

JAKARTA, Dec 11 (Reuters) - Indonesia's economic growth is likely to slow to a seven-year low next year, weaker than seen three months ago, hit by falling global demand, a quarterly Reuters poll shows.

Southeast Asia's biggest economy is expected to grow 4.8 percent in 2009, slower than the 6.2 percent expansion predicted in a similar poll in September. The poll forecast growth to rebound to 5.6 percent in 2010.

Finance Minister Sri Mulyani Indrawati said on Dec. 2 that the economy may grow between 4.5 and 6 percent in 2009, compared with a 6.2 percent growth seen for 2008.

In addition to the weakening global outlook, investment growth will also slow due to a weak rupiah which "raises import costs of raw materials and capital goods for many industries," economist Eric Alexander Sugandi of Standard Chartered Bank said.

Unlike its counterparts in many other economies, Indonesia's central bank has been slow to cut interest rates amid fears of further weakness in the rupiah , which has lost nearly a quarter of its value per dollar this year.

Bank Indonesia cut its benchmark overnight policy rate by 25 basis points to 9.25 percent on Dec. 4, easing for the first time in 12 months after raising the rate several times earlier this year to curb inflation. [ID:nJAK61417]

Indonesia's economy grew 6.3 percent in 2007, the fastest pace in a decade and above the minimum 6 percent level which analysts said was needed to make a dent on unemployment, currently around 10 percent.

Despite the slowdown, analysts predict the world's fourth-most populous country to grow at a higher pace than many of its neighbours, helped by healthy domestic consumer demand.

Analysts attributed the healthy consumer demand to higher budget spending before presidential and parliamentary elections next year, as political parties typically spend money on gifts such as T-shirts and food to woo voters. Results of the poll:

GDP CPI Trade

Balance

(pct change) (pct change) (US$ bln)

2009 2010 2009 2010 2009 2010 Action Economics 4.5 6.0 7.5 6.5 30.0 35.0 Bank Danamon 4.3 5.0 8.2 6.5 22.3 19.6 BCA 5.6 6.1 7.0 6.9 19.0 N/A BII 5.3 6.0 6.8 6.2 29.2 30.2 DBS 4.8 5.6 7.2 5.3 N/A N/A IDEAglobal 5.5 N/A 7.5 N/A N/A N/A Mandiri Sekuritas 4.8 5.3 7.7 N/A N/A N/A OCBC 4.7 5.3 7.0 6.0 24.0 28.0 RBS 3.1 5.0 6.5 6.5 17.1 21.5 Standard Chartered 4.5 6.2 6.0 7.7 27.0 N/A ---------------------------------------------------------- Median 4.8 5.6 7.1 6.5 24.0 28.0 Forecasts for rupiah exchange rate per dollar:

end-June 2009 end-Dec 2009 Action Economics 12,500 11,000 Bank Danamon 11,200 10,800 BCA 10,150 N/A BII 10,520 9,750 DBS 11,500 10,700 IDEAglobal N/A N/A Mandiri Sekuritas 11,600 N/A OCBC 13,200 12,000 RBS 13,500 12,500 Standard Chartered 10,800 9,300 ------------------------------------------------- Median 11,500 10,800 Median forecasts made in previous Reuters polls:

GDP CPI TRADE BALANCE

Pct change Pct change US$ bln

2008 2009 2008 2009 2008 2009 Sep 2008 6.2 6.2 11.9 7.6 33.6 30.8 July 2008 6.0 6.2 11.2 7.0 34.1 38.1 Mar 2008 6.20 6.20 7.00 6.70 38.00 39.5 Dec 2007 6.40 N/A 6.40 N/A 39.40 N/A Sep 2007 6.45 N/A 6.21 N/A 45.00 N/A Jun 2007 6.40 N/A 6.00 N/A 42.17 N/A Median rupiah forecast in previous Reuters poll:

end-2008 end-June 2009 March 2008 9,000 N/A September 2008 9,288 9,350 Historical data:

GDP CPI TRADE BALANCE

pct change pct change US$ bln 2003 4.9 5.1 28.5 2004 5.1 6.4 25.1 2005 5.6 17.1 28.5 2006 5.5 6.6 39.6 2007 6.3 6.6 33.1 ---------------------------------------------------------- 5-yr average 5.5 8.4 31.0 (For all poll results for Asia, please click on ) (Editing by Alex Richardson)