ECONOMIC NEWS TEMPLATE

JAKARTA, Indonesia -- Indonesia's economy expanded at a 3.93% annual pace in
the third quarter as local consumer spending bolstered growth in the absence
of fresh investment.

Gross domestic product, or the value of all goods and services produced in a
nation, grew 2.93% from the second quarter, the Central Bureau of Statistics
said.

The third quarter marked an improvement from the second quarter, when GDP
grew at an annual 3.75% pace and grew 1.66% from the first quarter, revised
statistics show.

Economists polled by Dow Jones Newswires had expected third-quarter GDP to
grow at an annual 4.03% rate and grow 3.05% from the prior quarter. Indonesia
looks set to meet its 4% growth target based on the third-quarter numbers,
economists said. Last year, the economy grew at a rate of 3.66%.

Still, the economy is expanding far slower than its potential 6% to 7% annual
pace due to sluggish investment, the economists added. Indonesia's growth
levels, although better than many of its Asian neighbors, are unable to create
enough jobs to stop employment from rising from 10% of its work force, the World
Bank says.

However, local consumption, which accounts for about two-thirds of GDP, grew
4.80% in the third quarter from a year earlier.

Lower interest rates this year have helped boost consumption. The benchmark
rate on the central bank's one-month notes stands at 8.47%, down sharply from
more than 12% late last year, amid decelerating inflation.

Increased bank lending also helped underpin consumption. Commercial bank
loans to consumers grew 34% in the third quarter from a year earlier, according to
Bahana Securities.

Elsewhere, government spending rose 9.64% from a year earlier, helping to
boost local growth. The government often undertakes most of its budgeted
expenditure in the second half of the year. Still, the government's efforts to balance
the budget by 2006 are limiting its ability to stimulate the economy,
analysts said.

External demand failed to add much to GDP, with Indonesian exports growing
0.7% in the third quarter amid weak demand from the U.S. and Japan and rising
competition from Chinese products in overseas markets.