Bandung, Indonesia - Incumbent Indonesian President Susilo Bambang Yudhoyono on Friday declared the central bank's governor as his running mate for his re-election bid in July.

Yudhoyono's nomination of Bank Indonesia Governor Boediono as his vice-presidential running mate is likely to be welcomed by the financial markets as the central banker has a reputation for being a capable and market-friendly economist.

Yudhoyono said the next government would face an uphill battle as the country began to feel the brunt of the global economic crisis.

Indonesia's economy is expected to grow about 4 per cent this year.

"We will not make many promises. Our government has worked and will continue to work to produce something real," Yudhoyono told an event held to announce the nomination in the West Java capital of Bandung.

Critics say Boediono is a proponent of economic "neoliberalism" and is likely to toe the line of the International Monetary Fund (IMF) and the World Bank in dealing with the crisis.

"I realize my nomination has sparked controversy, but that's a sign of vibrant democracy," Boediono said in a speech accepting his nomination.

Some economists welcomed the nomination of the US-educated former university professor.

"Boediono is a household name in the financial markets," Fauzi Ichan, chief economist at Standard Chartered Bank, told Metro TV. "The market perception of him is good."

Yudhoyono's Democratic Party won the April 9 legislative elections with 20.8 per cent of the vote.

The Democrats are allying with the Islam-based Justice and Prosperity Party (PKS) and other smaller, mostly Muslim parties, to give him a strong support base in parliament.

Parties, or coalitions of parties, that won at least 20 per cent of seats in the 560-member House of Representatives, or 25 per cent of the popular vote, may nominate candidates for the July 8 presidential election.

With a popularity rating at above 60 per cent, Yudhoyono could win the first round hands down and avoid a run-off. A run-off would be scheduled in September if no candidate wins more than 50 per cent of the vote.

Yudhoyono's government has been credited with managing the economy well, improving security after a series of attacks blamed on Islamic militants and fighting corruption in one of the world's most graft- prone countries.

The Golkar Party, once a vehicle of former autocratic president Suharto, has nominated its chairman, incumbent Vice President Jusuf Kalla, for the presidential poll.

Coalition talks between Golkar with Yudhoyono's Democratic Party collapsed last month.

Kalla has picked former armed forces chief General Wiranto as his running mate.

Yudhoyono's close rival in opinion polls, former president Megawati Sukarnoputri, is expected to pick another former general, Prabowo Subianto as her running mate in another attempt to win her old job.

Human rights activists have accused both Wiranto and Prabowo of rights violations when they were in the military. (dpa)