Jakarta – Indonesia's consumption-driven economy is expected to grow faster than expected this year but it still lags behind the rest of Asia in exports and investment, the World Bank said Tuesday.

The World Bank, in its East Asia economic update, forecast growth of 4.5 percent this year compared to its estimate six months ago of four percent due to a stronger international economic recovery and lower interest rates.

But it cautioned that "growth remains consumption-driven, with exports and investment under-performing compared to other Asian countries." Investment as a share of gross domestic product is 10 percentage points below levels reached before the 1997/98 regional financial crisis, it said. While there were some signs that growth could speed up, concerns about the investment climate remain and uncertainty about the new government would not be resolved until the end of the year.

Indonesia's general election on April 5 will be followed by a presidential poll on July 5, with a likely second round on September 20.

"For Indonesia the key challenge remains accelerating growth. Turning this around requires improving the investment climate and improving Indonesia's competitiveness," said the World Bank's lead economist for Indonesia, Bert Hofman.