2003 GDP growth slightly exceeds official target<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
Despite the Severe Acute Respiratory Syndrome (SARS) outbreak,
\nand terrorist attacks at home, the economy recorded a 4.1 percent
\ngrowth last year, higher than the 2002 growth rate and slightly
\nhigher than the official target, the Central Statistics Agency
\n(BPS) reported on Monday.<\/p>\n
The BPS said domestic consumption continued to be the main
\ndriver of economic growth, accounting for around 78 percent of
\nthe gross domestic product (GDP), or the value of goods and
\nservices produced throughout the year.<\/p>\n
The government targeted economic growth at 4 percent for 2003,
\ncompared to the 3.77 percent growth recorded in 2002.<\/p>\n
Initially, doubts lingered as to whether economic growth could
\naccelerate to 4 percent, due to the SARS outbreak epidemic in the
\nfirst quarter and the deadly Marriott Hotel bombing in August --
\nboth of which threatened the tourist industry, a major source of
\nforeign exchange revenues, and dampened consumer and business
\nsentiment.<\/p>\n
But the government moved quickly to fix the situation by
\nproviding business incentives and encouraged people to spend more
\nmoney.<\/p>\n
Analysts said earlier that relatively benign inflation and low
\ninterest rate environment -- thanks mainly to the falling value
\nof the U.S. dollar and global interest rates -- had contributed
\nto stronger consumer spending power as banks boosted loans for
\nthe purchase of houses, cars and motorcycles.<\/p>\n
Bank Indonesia had lowered its benchmark interest rate to 8.31
\npercent by the end of 2003, from nearly 13 percent in the
\nbeginning of the year, while inflation had dropped to 5.02
\npercent from more than 10 percent in 2002.<\/p>\n
The BPS also noted slight improvements in investment and
\nexport: private consumption grew by 4.02 percent last year and
\ngovernment consumption rose by 9.84 percent, exports of products
\nand services rose by 4.04 percent and imports were up by 1.96
\npercent. Meanwhile, investment expanded by 1.36 percent.<\/p>\n
On the other hand, weak investment and export performances had
\nprevented the economy from returning to its pre-crisis growth
\nrate of 6-7 percent, which would create jobs for the millions of
\nunemployed.<\/p>\n
Calculations show that each 1 percentage point of growth could
\nreduce unemployment by 400,000. Based on this assumption, some
\n1.64 million workers should have been absorbed in 2003 -- far
\nbelow the 2.5 million workers estimated to enter the job market
\nannually.<\/p>\n
There are currently 40 million Indonesians reportedly living
\nbelow the poverty line.<\/p>\n
The BPS also reported that in the fourth quarter of 2003, GDP
\nwas down 2.78 percent from the previous quarter, hurt by numerous
\npublic holidays, although it rose by 4.35 percent year-on-year.<\/p>\n
The government expects a 4.8 percent growth in 2004, betting
\non the continued rise in exports and a more robust consumption --
\nfueled by generous spending by political parties during the
\nnational elections -- to offset investment, which is predicted to
\nremain in the doldrums, at least until after the elections.<\/p>\n
The central bank has predicted private consumption this year
\nwould grow by between 4.2 percent to 5 percent, while exports
\nwould improve at 2.5 to 3.5 percent, assuming the country is able
\nto take advantage of the continuing global economic recovery.<\/p>",
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