09/12/2011 (Dow Jones) - Indonesia's exports may fall by as much as 20% next year because of slowing global demand, a senior trade ministry official said Thursday, although its overall economic growth will likely continue to hover above 6%.

"Should the European debt crisis continue to worsen and the narrowing U.S. budget deficit become an issue, 2012 exports could slow by up to 20%...to about $160 billion," said Deddy Saleh, director general of international trade at the trade ministry.

"Our more optimistic forecast is for exports to be stagnant or only decline by 10%," Saleh added. Indonesia is a major exporter for key global commodities such as rubber, crude palm oil, tin and coal.

However, Indonesia's economy is largely driven by domestic consumption, which accounts for around two-thirds of its gross domestic product.

Bank Indonesia, the country's central bank, said earlier in the day that it forecast 2012 economic growth of between 6.3%-6.7%, maintaining its momentum after an estimated expansion of 6.5% this year.

Apart from robust consumption, investment will likely continue to rise and help buoy economic growth.

Azhar Lubis, a deputy at Indonesia's state investment agency, or BKPM, said private investment could rise to IDR283 trillion ($31.3 billion) next year from an estimated IDR240 trillion this year. Lubis added investment may even accelerate in the coming years after the government announced further tax incentives in August.

BKPM doesn't track private investment made by oil and gas companies, banks and small enterprises.