Indonesia Expands 6.9% in Fourth Quarter, Fastest Pace Since 2004

Indonesia’s economy grew at the fastest annual pace in six years last quarter, adding to the case for the central bank to raise interest rates further as inflation accelerates.

Gross domestic product rose 6.9 percent in the three months through December from a year earlier, compared with 5.82 percent previously reported for the third quarter, the Central Bureau of Statistics said in Jakarta on 6 February. GDP increased 6.1 percent in 2010.

Indonesia joins counterparts from China to Singapore in reporting accelerating growth in the fourth quarter as Asia weathers risks including elevated U.S. unemployment and strives to restrain inflation. Economists from UBS AG and Royal Bank of Canada are among those predicting the nation’s borrowing costs will rise to 8 percent this year, following a quarter percentage-point increase to 6.75 percent last week.