The government has slashed its 2009 growth forecast to between 4.5% and 5%, Finance Minister Sri Mulyani Indrawati said on Tuesday, Agence France-Presse reported.
Indrawati told an investor conference the economy would likely grow well below the budget target of 6.1% next year. The minister said year-on-year growth could come in below 6% during the fourth quarter of this year from 6.11% in the third. For the entire year, the economy could expand by 6.2%.
The government will provide tax relief worth an estimated Rp12.5 trillion next year to help businesses, she said. The minister also forecast the rupiah, which has recently sunk to 10-year lows of around Rp.12,500 to the dollar, would average Rp9,675 against the greenback this year.
"Interest rates, given expectations of falling inflation, may be adjusted," Indrawati told reporters.
Annual inflation was 11.77% in October, easing from 12.14% in September due to softer energy and commodity prices globally.