Jakarta – Indonesia's increasing economic stability is not translating into higher growth, the World Bank said on Thursday.

The bank, in its East Asian outlook as quoted by AFP, forecast gross domestic product growth of 3.3 percent this year, lower than the government's projection, and 4.0 percent in 2004.

The economy had shown "remarkable resilience" to last October's Bali terror bombings. Increased political stability and economic reforms under the current government had been beneficial for macroeconomic stability, with inflation and interest rates falling and the rupiah strengthening.

"However, there are few signs that macroeconomic stability and reduced vulnerability [to shocks such as Bali] is translating into higher growth." The government's forecast for 2003 growth is for 4.0 percent. It has not made a forecast for 2004. The economy grew 3.66 percent last year.