March 1, 2012 / 9:37 AM / in 5 years

UPDATE 1-Indonesia to modify GDP forecast to 6.5-6.7 pct

(Adds details)

JAKARTA, March 1 (Reuters) - Indonesia plans to modify its GDP growth forecast to 6.5-6.7 percent in the proposed revision of the 2012 state budget, versus a current 6.7 percent growth target, the chief economics minister said on Thursday.

Minister Hatta Rajasa also told reporters the government would revise this year's inflation target upwards to 6-7 percent from 5.3 percent in the current budget, while raising the benchmark Indonesian crude price (ICP) to around $105 a barrel from $90.

Southeast Asia's largest economy always revises its state budget, but is doing so sooner than usual this year because state coffers are under pressure from rising global oil prices.

The government plans to raise subsidised fuel prices by a third or link them to floating market rates.

"We see global growth is relatively trending down. We will manage food prices so they will not be too volatile," said Rajasa after a cabinet meeting with President Susilo Bambang Yudhoyono.

Finance Minister Agus Martowardojo, speaking separately, gave slightly different figures and said the GDP growth forecast would be revised down to 6.5 percent and the ICP raised to above $100 a barrel.

Rajasa is the most senior economy minister while the finance minister is charged with designing the budget revision. Indonesian government officials sometimes give conflicting accounts of the economy. (Writing by Aditya Suharmoko; Editing by Matthew Bigg)

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