ECONOMIC GROWTH, POVERTY RATE TO RISE IN 2010 : LIPI RESEARCHER

Jakarta, Dec 30 (ANTARA) - Indonesia is likely to see higher economic growth in 2010 but also an increase in the poverty rate, an economic researcher at the Indonesian Institute of Sciences (LIPI) said.

"We estimate economic growth in 2010 could reach 5.9 percent but the number of poor people is probably to rise to 32.7 million from 32.5 million in 2009," LIPI economic researcher Agus Eko Nugroho said here Tuesday.

The national economy could grow at a rate higher than the 5.5 percent projected in the 2010 State Budget because of an impetus from global economic performance, especially from economic resurgence in the Asian region.

Investment was also expected to grow on the need for Rp1,700 trillion in domestic investment, Rp979.363 trillion in non-facility and money market investment. Foreign investment was expected to reach Rp225,200 trillion, funds held by the banking industry Rp345.911 trillion, and government expenditures Rp179.079 trillion.

But the relatively rapid economic growth would also be accompanied by a rise in the inflation rate to 5.6 percent.

"Increased inflation will prevent the improved economic growth from resulting in a rise in the welfare level of the poor," Agus said.

Meanwhile, the government's poverty eradication effort through the scheme known as National Self-Reliant Community Empowerment Program (PNPM) would not directly result in an improvement of poor people's conditions.

"The program is more oriented to the establishment of physical structures whose benefit cannot be directly enjoyed by the poor," Agus said.