JAKARTA (Dow Jones): The Indonesian government Thursday said it expects the economy to grow by 5.5% next year, up from the 5.4% forecast in the 2005 state budget presented earlier.

Finance minister Jusuf Anwar told legislators at a hearing session that the government expects inflation next year to rise to around 7%, up from 5.5% projected by the previous government.

Interest rates are expected to rise to between 7.5% and 8.5% from the 6.5% previously forecast.

Anwar said the government will also need to sharply revise the forecast of oil prices to $35 barrel from $24 barrel stated in the state budget.

Former President Megawati Sukarnoputri had, in August, presented the state budget.

"Due to the uncertain oil price movement, I expect that Parliament could consider to approve new numbers of economic forecasts for next year," he said.

The government and Parliament will, over a series of meetings, determine the new set of economic forecast numbers for next year.

Anwar expects that the revision will be completed by April or May. (*)