Urip Hudiono, Jakarta – Indonesia's economy is expected to wrap up the year on track in line with the government's forecasts, despite risks to inflation and growth from the recent rise in global oil prices, the latest market confidence survey from the central bank shows.

Prospects for next year, however, may be no better than this year if the risks stir up real trouble for the economy ahead.

For the remaining three months of this year, close to 75 percent of the survey's respondents saw Indonesia's economy as still being able to expand by between 6.1 and 7 percent this year.

Inflation for this year was expected to be in a similar range, while the rupiah should hover between Rp 9,000 and 9,250 to the US dollar.

Bank Indonesia's (BI) quarterly survey questioned a total of 100 economists, market analysts and academics from 13 major cities around the country.

The government is targeting growth of 6.3 percent for 2007 – improving to 6.8 percent next year – on an inflation rate easing from 6.5 percent this year to 6 percent in 2008.

Apart from growth still being based mainly on consumption, a majority of the respondents – nearly 80 percent – said that this year had been more favorable for investment and exports.

Exports are expected to grow more strongly at between 15.1 and 22.5 percent, leading to a current account surplus of between 1.5 and 3 percent of gross domestic product.

Looking ahead, however, a possible "slowdown in the global economy" and "still high global interest rates" could prove to be stumbling blocks for the economy, along with a "continued lack of stimulus for growth from government fiscal policies." Other "classic problems" included "inconsistencies in government policies and regulations", which were likely to put off investors.

Economists have warned of a possible slowdown in the world economy next year due to the effects of the recent US subprime mortgage market turmoil and, now, rapidly increasing global oil prices.

BI has warned that a sustained surge in the prices of oil and other commodities could fuel higher inflation from imports in the long run.

All this could, in turn, spell bad news for Indonesia's economy, with lower consumer demand translating into less investment.