THE Indonesian economy is growing at an increasingly faster rate: from 6 percent in the first quarter of 2007 to 6.3 percent in the second, and 6.7 percent in the third quarter. Evidence of accelerated economic growth is also shown in the rising Coincident Economic Index (Figure 1).

Economic growth in the third quarter of the year was largely driven by stronger domestic demand. One of the clearest indicators was seen in annual household spendin