ADB revises upward RI's 2002 GDP growth estimate<\/p>\n
A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
The Asian Development Bank (ADB) has revised upward its 2002
\neconomic growth prediction for Indonesia from an earlier 3
\npercent to 3.2 percent.<\/p>\n
The higher prediction was based on an expected recovery in
\nexports, particularly on the back of higher oil prices.<\/p>\n
The ADB said that consumption demand would be sustained,
\nalthough at a lower rate than in 2001, and the agricultural
\nsector would also perform well during the rest of this year.<\/p>\n
The bank said in the \"Asian Development Outlook 2002 Update\"
\nreport that gross domestic product (GDP) growth for 2003 was
\nprojected at 4.4 percent.<\/p>\n
ADB did not give its prediction for the oil price, but the
\noptimistic projection seems possible amid the growing tension in
\nthe Middle East.<\/p>\n
Due to fears of a U.S.-led attack on Iraq, oil hit US$30 a
\nbarrel for the first time in 18 months in August.<\/p>\n
The higher oil price would benefit oil exporting countries
\nlike Indonesia.<\/p>\n
With the increasing price of oil, Indonesian exports from the
\noil sector could increase as well, which could ease pressure on
\nthe state budget.<\/p>\n
The government has targeted the economy to grow by 4 percent
\nthis year, and by about 5 percent next year. This year's growth
\nis expected to be mainly driven by strong domestic consumption,
\nwhile a stronger export performance next year is expected to help
\npush economic growth higher.<\/p>\n
The higher economic growth is crucial to help absorb the huge
\nunemployment in the country, which according to one estimate has
\nreached around 40 million out of the total labor force of around
\n100 million people.<\/p>\n
But independent economists have warned that the 5 percent
\ngrowth projection was rather too optimistic given fragile
\neconomic conditions in the U.S. and Japan, Indonesia's major
\nexport markets.<\/p>\n
A host of problems at home, such as security concerns, legal
\nuncertainty and lingering labor conflicts are discouraging
\ninvestors from making new investments here. During the first
\nhalf of this year, for example, foreign direct investment (FDI)
\napproval declined by around 42 percent compared to the same
\nperiod last year. Domestic investment approvals had also
\nplunged.<\/p>\n
Minister of Industry and Trade Rini MS Soewandi said
\npreviously that higher prices for agricultural commodities were
\nexpected to improve the country's export performance.<\/p>\n
A report in this paper last week said that the price of cacao
\nhit a 13-year high of about Rp 17,000 per kilogram amid fears of
\nlower output from the world's largest producer, the Ivory Coast,
\nand rising global demand.<\/p>\n
Indonesia is currently the world's third largest producer of
\ncacao with an output this year expected to reach 400,000 tons.<\/p>\n
The price of crude palm oil (CPO) has also beein on a rising
\ntrend. Indonesia along with Malaysia are among of the world's
\ntop CPO exporters.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/adb-revises-upward-ris-2002-gdp-growth-estimate-1447893297",
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"sponsor": "Okusi Associates",
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