Australia may boost growth forecasts for Indonesia<\/p>\n
CANBERRA (Dow Jones): Australia's Treasury Department said
\nTuesday it expects to upgrade calendar 1999 economic growth
\nforecasts for Indonesia and South Korea issued May 11 in the
\ngovernment's budget.<\/p>\n
Ken Henry, executive director of Treasury's economic group,
\ntold a Senate economics legislation committee that Treasury
\ncurrently forecasts a 6 percent contraction in the Indonesian
\neconomy in 1999, swinging to 2.5 percent growth in 2000.<\/p>\n
\"But Indonesia could be significantly stronger in both 1999
\nand 2000,\" Henry said, citing recent quarterly economic growth
\ndata as the key factor behind the changed outlook.<\/p>\n
The Indonesian economy grew 1.34 percent in the 1999 first
\nquarter from the 1998 fourth quarter, but was down 10.34 percent
\nfrom the year-earlier quarter. Jakarta expects gross domestic
\nproduct growth of 0 percent-2 percent for the fiscal year ending
\nMarch 31, 2000.<\/p>\n
Henry said Treasury might also increase its growth forecast
\nfor South Korea in 1999 from 3 percent following better-than-
\nexpected GDP data for the first quarter, but likely will leave a
\n5 percent projection for 2000 unchanged.<\/p>\n
Due to growth in private consumption, capital investment and
\nexport volume, South Korea's GDP grew 4.6 percent year-on-year in
\nthe first quarter of 1999.<\/p>\n
Earlier this month, the country's Finance and Economy Minister
\nKang Bong-kyun said GDP could grow 4 percent-6 percent in 1999.<\/p>\n
Treasury didn't give a timeframe for when it would adjust its
\neconomic forecasts.<\/p>\n
Turning to China and ongoing market speculation that Beijing
\nwill devalue the yuan, Henry said Treasury believes this won't
\noccur within the next 12 months.<\/p>\n
\"It seems to us unlikely that peg will be either adjusted or
\ndisappear, that is that China would either devalue or float,
\nwithin the next 12 months,\" he said.<\/p>",
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