Econit sees slower economic growth<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
The country's economic growth will slow down to about 3 percent
\nnext year due to a lack of progress in reviving investment and
\npushing exports, private think tank Econit said in its year-end
\neconomic review.<\/p>\n
Econit managing director Hendri Saparini also said that
\ndomestic consumption, which has been the main driver of growth
\nthis year, would likely slow in 2003.<\/p>\n
\"Three percent growth for 2003 will be just adequate amid the
\nunfavorable conditions and the lack of economic stimulus to move
\nthe economy,\" Hendri said during a press conference.<\/p>\n
She added that rising political tension next year, in the run-
\nup to the 2004 general election, would further make the job of
\npushing exports and investment more difficult as businesses would
\ntend to remain on the sidelines.<\/p>\n
The government is targeting 3.8 percent economic growth this
\nyear, and has projected 4 percent growth next year on the back of
\ncontinuing strong domestic consumption and improvement in exports
\nand investment.<\/p>\n
But even at this growth level, many people who lost their jobs
\nduring the late-1990s economic crisis would remain out of work.
\nExperts have said the country needs to post economic growth of
\nabout 6 percent or 7 percent to absorb the millions of unemployed
\npeople.<\/p>\n
Econit said there were signs domestic consumption was starting
\nto weaken, as indicated in slowing motorcycle sales.<\/p>\n
The think tank pointed out that motorcycle sales during the
\nthird quarter of 2002 grew by only 49 percent, compared to 77
\npercent and 82 percent respectively in the same period in 2000
\nand 2001.<\/p>\n
Motorcycle sales are seen as one indicator of domestic
\nconsumption levels.<\/p>\n
Econit said the slowing pace of domestic consumption was a
\nresult of the waning purchasing power of the people due to the
\nslow progress of the country's economic recovery.<\/p>\n
On the investment front, the outlook remains cloudy as the
\ngovernment of President Megawati Soekarnoputri has failed to
\ncreate a conducive investment climate at home amid lingering
\nlabor conflicts, security problems in several regions, corruption
\nand poor implementation of the regional autonomy law, according
\nto the think tank.<\/p>\n
Foreign direct investment fell by 11 percent to US$5.4 billion
\nin January-September of this year from $6.08 billion in the same
\nperiod in 2001.<\/p>\n
The same problems are also hurting the country's exports.<\/p>\n
Export revenue declined by 2.8 percent to $42.5 billion in the
\nJanuary-September period of this year from the same period last
\nyear.<\/p>\n
Security problems and labor conflicts have prompted foreign
\nbuyers to seek for other suppliers in the region.<\/p>\n
Hendri said that with problems in the country's economic
\nfundamentals, the current strengthening of the rupiah against the
\nUS dollar was unlikely to continue.<\/p>\n
She said the stability of the rupiah was not a result of the
\ngovernment's economic policy, but was mainly caused by external
\nfactors like the general weakening of the U.S. dollar against
\nregional currencies.<\/p>\n
She added that the disbursement of an International Monetary
\nFund loan tranche to the country also contributed to the recent
\nstrengthening of the rupiah.<\/p>\n
\"It's a pity that the government could not take advantage of
\nthe positive momentum created by the appreciation of the rupiah
\nto push exports,\" Hendri said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/econit-sees-slower-economic-growth-1447893297",
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