Indonesia's economy grew by more than 6% for the sixth straight quarter as cheap borrowing fueled demand for homes, and exports rose on higher prices of coal, Bloomberg News reports.

Gross domestic product in Southeast Asia's biggest economy expanded 6.28% in the three months ended March 31 from a year earlier, compared with 6.25% in the fourth quarter, the statistics bureau said today in Jakarta.

Private consumption, which accounts for about 70% of the economy, may cool amid plans by the government to raise fuel prices by as much as 30% to cut government outlays. Spending may also drop after Bank Indonesia raised borrowing costs for the first time in more than two years to tame the fastest inflation in 19 months.

Welfare Minister Aburizal Bakrie said that fuel prices will probably increase 30% after the government completes a plan

Concern over a widening deficit partly explains why Indonesian bonds have handed holders a loss of 8.8% so far this year, the worst performance of 10 Asian local-currency debt markets, according to indexes compiled by HSBC Holdings Plc.

The last time investors lost faith in the government's ability to curtail its budget deficit in the face of rising fuel costs, investors dumped Indonesian assets, causing the rupiah to tumble 7% to a four-year low in August 2005. The government more than doubled fuel prices a month later that year and Bank Indonesia increased borrowing costs to 12.75% to stem inflation.