Indonesia's economy grew by 2.5% in the first three months of the year, a far slower rate of growth than had been expected.

And analysts say a much more impressive expansion is needed to create sufficient jobs to sustain a long-term economic revival.

Indonesia is still recovering from the Asian financial crisis of 1997-1998, which led to the collapse of many companies and caused lay-offs in almost all sectors of the economy.

The government is targeting 4% growth this year, while the United Nations has recently said that growth of a least 6% a year is needed to reduce unemployment .

Analysts were surprised by the first quarter figures, and the central bank had been predicting 3.2% growth.

Manufacturing was particularly weak, falling 1.4% compared to the last three months of 2001.

Export ambitions

The country has recently drawn up a programme aimed to create about 1.15 million jobs and boost export revenues by more than 50% to $40bn (£30bn) in 2004.

Unemployment and underemployment figure is estimated at 42 million people, or 40% of the workforce.

Indonesia is seen as badly needing foreign capital for its long-term development, but analysts say corruption and nepotism are widespread, and the country needs to sort out its legal system before foreign investors will return.

The government of president Megawati Sukarnoputri also faces the problem of servicing the country's huge debt burden.