Bank Indonesia forecasts 4 percent growth this year<\/p>\n
JAKARTA (JP): Bank Indonesia (BI) predicted on Wednesday an
\neconomic growth of 3 to 4 percent and an inflation rate of 3 to 5
\npercent for this year.<\/p>\n
In its report on policy direction for 2000, the central bank
\nforecasted that the rupiah would stay stable at about Rp 7,000 to
\nthe U.S. dollar.<\/p>\n
The relatively low inflation rate and stable rupiah should
\ngive more room for the central bank to lower its benchmark
\ninterest rate further, the report said.<\/p>\n
To achieve those targets, the central bank aims to control the
\ngrowth of base money by 8.3 percent this year.<\/p>\n
\"Entering the year 2000, the process of Indonesian economic
\nrecovery gains greater momentum in line with improvement in
\nvarious sectors, especially the domestic political and economic
\nfronts,\" BI said in its report.<\/p>\n
BI projected gross domestic product growth of 0.1 percent for
\n1999, compared to a contraction of nearly 14 percent at the peak
\nof the financial crisis in 1998.<\/p>\n
The central bank also projected an inflation rate of 2.01
\npercent last year, down from hyperinflation of 78 percent in
\n1998.<\/p>\n
BI, however, warned that its estimate for the inflation rate
\nin the current year did not yet include any increases in fuel and
\npower prices, civil servants' wages or import duties on rice and
\nsugar.<\/p>\n
\"Those government policies are projected to result in an
\nincrease of 2 percent in the inflation rate,\" it said.<\/p>\n
To help contain inflation, BI will control the growth of base
\nmoney by 8.3 percent through improved open market operation. BI
\nwill also control the flotation of government bonds held by
\ncommercial banks in the market. Banks will be allowed to sell up
\nto 10 percent of their total bond holdings.<\/p>\n
At the same time, BI will also continue its policy of keeping
\ninterest rates low to help revive the banking industry and also
\nthe real sector, which will thus stimulate economic growth.<\/p>\n
BI noted that the growth of the country's gross domestic
\nproduct this year would be driven especially by increasing
\ndomestic consumption and investment, as well as rising exports
\nand imports.<\/p>\n
Private consumption is expected to grow by 3 to 4 percent,
\nwhile government consumption should rise by 5 to 6 percent.<\/p>\n
Private investment is predicted to rise 1 to 2 percent while
\ngovernment investment will grow by 2 to 3 percent.<\/p>\n
BI expected exports of goods and services to rise 1 to 2
\npercent this year, while imports should grow 11 to 12 percent.<\/p>\n
Despite the rapid growth of imports, the country will still
\nrecord a positive current account surplus this year, but it will
\nbe lower than the $5.2 billion recorded in 1999.<\/p>\n
BI Governor Sjahril Sabirin said the announcement of the
\ndamning audit report on the central bank by the Supreme Audit
\nAgency should not affect the central bank's ability to achieve
\nthose targets.<\/p>\n
\"The results of that audit will not affect BI in performing
\nits duties as the central bank,\" Sjahril said.<\/p>\n
BI senior deputy governor Anwar Nasution said he saw no reason
\nnot to be optimistic that BI would be able to maintain
\nmacroeconomic stability this year as it did in 1999.<\/p>\n
He said BI did a good job last year in controlling inflation
\nto about 2 percent from 78 percent in 1998, maintaining the
\nstability of the rupiah at the Rp 7,000 level to the dollar and
\nlowering its benchmark rate to over 11 percent from over 35
\npercent at the end of 1998.<\/p>\n
\"All indicators give good hope. All economic players,
\nincluding BI, should also give good hope,\" Anwar said.<\/p>\n
Nevertheless, BI warned in its report that the snail's pace of
\ncorporate debt restructuring and the delayed recapitalization of
\nthe country's rotten banks could hamper the economic recovery
\nprocess.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bank-indonesia-forecasts-4-percent-growth-this-year-1447893297",
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