Indonesian President Susilo Bambang Yudhoyono said Tuesday in Jakarta that the country's economic growth would reach 6.2 percent next year and the progress will continue to flourish afterward in line with the country's effort to eliminate a variety of constrains.

The hike of foreign investment was expected to rise in line with the improved international faith in Indonesia, President Susilo said at the parliament ahead of the anniversary celebration of independence day on Aug. 17.

"The target of a 6.2 percent growth (in 2006) is still below the potential of Indonesian economy," he said.

However, the president said the economic growth would not reduce unemployment and poverty rate significantly.

He said the rupiah exchange rate of the draft state budget will be assumed to be at 9,400 level against the US dollar, an inflation rate of 7 percent, and that Bank Indonesia certificate's interest rate for three months is at 8 percent.

The assumptions on the draft state budget most probably could be revised due to soaring world fuel price, he said, adding that Indonesian crude oil price in 2006 will be set on the basis of supply and demand development.

A release from the Finance Ministry said that Indonesia will produce 1,075 million barrels of oil per day next year and set its price at 40 US dollars per barrel.

The president expressed hope that the banking sector will maximize its potential to disburse credit including to increase lending to micro, small and medium-scale enterprises.

Therefore, he said, the government has been improving the financial sector monitoring system, inter-agency coordination system and financial risk anticipation capability.

Source: Xinhua