2 Jan 2009

Indonesia's president plans stimulus for economy

10:06 am on 2 January 2009

Indonesia's president has promised further fiscal stimulus to help Southeast Asia's biggest economy withstand the global economic slump.

President Susilo Bambang Yudhoyono, who faces elections this year, said the government would give priority to jobs and inflation, cut subsidised fuel prices further, and launch a new fiscal stimulus in addition to spending plans set in the state budget.

Indonesia's economy is still expanding, but growth may drop below the 6% pace that analysts say is needed to prevent unemployment from rising among its 226 million people.

Unemployment is officially 8.5%, though the the figure includes those who work only a few hours a week.

President Yudhoyono said growth in 2008 would be about 6%, and would be above 4.5% in 2009. Previously, Finance Minister Indrawati said she expected economic growth to slow to 5% in 2009.

Governments across the industrialised world have announced plans to spend hundreds of billions of dollars to pull their economies out of recession.