Economy shrinks for first time in 30 years<\/p>\n
JAKARTA (JP): Indonesia's economy plunged into negative growth
\nfor the first time in 30 years in the January-June period of this
\nyear, with a 12.3 percent contraction in the economy as compared
\nto the same period in 1997, the Central Statistics Agency (BPS)
\nreported yesterday.<\/p>\n
BPS head Suwito Sugito said that gross domestic product (GDP)
\nbased on 1993 prices was projected to shrink by 13.06 percent
\nover the course of 1998, the first time negative economic growth
\nhas been recorded since 1969.<\/p>\n
"Almost all sectors of the economy recorded a downturn in the
\nfirst six months of 1998 which was caused primarily by the sharp
\ndecline in the rupiah against the U.S. dollar," he told reporters
\nat a media conference.<\/p>\n
He added that political infighting since the May 21
\nresignation of former president Soeharto had discouraged
\ninvestment and further hindered an economic recovery.<\/p>\n
"Judging from the performance in the first half of this year,
\nthe economy will continue to face a serious crisis for the
\nremainder of 1998," Sugito said.<\/p>\n
The second quarter of this year was the worst period. During
\nthat quarter a year-on-year plunge of 16.54 percent was recorded,
\nwhile the contraction in the first quarter was only 7.89 percent,
\nhe said.<\/p>\n
He also said that negative economic growth and the sharp
\ndecline in the value of the rupiah against the dollar had slashed
\nper capita gross national product to US$436 from $1,055 in 1997.<\/p>\n
Among the sectors of the economy worst hit by the crisis were
\nthose which had a relatively high dependence on imported
\ncomponents, he said, pointing to the automotive and electronics
\nsectors which contracted by more than 55 percent, construction
\nwhich contracted by 36.08 percent, and fertilizers, chemicals and
\nmedicines which declined by 21.03 percent.<\/p>\n
He also said that some sectors had been badly hit by the
\ndecline in purchasing power, including air transportation
\ncompanies, the hotel industry, restaurants and other enterprises
\nin the entertainments industry.<\/p>\n
Sugito said that small growth had been recorded in the
\nagriculture, electricity, oil, gas and drinking water sectors.<\/p>\n
He also said that almost all sectors would experience negative
\ngrowth over the whole of 1998, but that agriculture would
\nactually increase its contribution to GDP, for the first time in
\n30 years, from 16 percent last year to 18 percent this year.<\/p>\n
He pointed out that the agriculture sector was the least
\ndependent on imports and provided a shield against the plunge in
\nvalue of the rupiah.<\/p>\n
"Natural resource based sectors like plantations, forestry and
\nfisheries will also show positive growth this year," he added.<\/p>\n
Sugito said that because of increasing domestic prices almost
\n70 percent of GDP would be eaten up by household expenditure in
\n1998, compared to 62.19 percent last year.<\/p>\n
Although the IMF sponsored program of economic reform was
\nexpected to improve the country's economy, he said that the
\nbenefits would not come quickly because the program would be
\nimplemented gradually.<\/p>\n
The IMF has committed itself to providing a total $10 billion
\nin loans to Indonesia, of which $4 billion has already been
\nextended and a further $1 billion of which is expected to be
\ndisbursed soon.<\/p>\n
The IMF has predicted that the country's economy will contract
\nby 10 percent over the 1998\/1999 fiscal year.<\/p>\n
Other donor institutions including the World Bank have
\ncommitted a total of $33 billion to Indonesia.<\/p>\n
The World Bank said yesterday that Indonesia's economy this
\nyear was expected to shrink by around 15 percent.<\/p>\n
It said that it would provide some of the additional $4
\nbillion to $6 billion Indonesia would required to close its
\nbudget deficit during the current fiscal year.<\/p>\n
Indonesia's budget deficit is expected to soar to 8.5 percent
\nof GDP. Most of the deficit arises from commitments to subsidize
\na number of essential goods. (rei)<\/p>\n
Table I: Gross Domestic Product (GDP) growth by sector (in percentage)
\nover 1997 period, based on 1993 constant prices<\/p>\n
Sector 1 semester* All year**
\n ---------------------------------------------------------------------
\n 1. Agriculture, husbandry, forestry and fishery 0.25 0.26
\n 2. Mining and quarrying (7.57) (6.87)
\n 3. Manufacturing (13.3) (12.0)
\n 4. Electricity, gas, and drinking water 0.3 (2.19)
\n 5. Construction (36.8) (35.44)
\n 6. Trade, hotel and restaurant (17.53) (21.42)
\n 7. Transportation and communication (6.49) (11.56)
\n 8. Finance, rentals and company services (16.88) (18.58)
\n 9. Services (5.11) ( 5.17)<\/p>\n
Gross Domestic Product (12.23) (13.06)<\/p>\n
* First semester of 1998 over first semester of 1997
\n ** Estimate for 1998 over 1997<\/p>\n
Source: Central Bureau of Statistics<\/p>\n
Table II: Gross Domestic Product by sectors for 1997 and 1998
\n(in billion rupiah)<\/p>\n
Sector 1997 1998<\/p>\n
Current 1993 Current 1993<\/p>\n
prices prices prices prices
\n -------------------------------------------------------------------------
\n 1. Agriculture, husbandry,<\/p>\n
forestry and fishery 100,349.1 64,149.1 171,661.8 64,313.1
\n 2. Mining and quarrying 59,492.1 38,181.5 108.404.7 35,558.1
\n 3. Manufacturing 159,829.9 108,631.4 257,062.4 95,592.8
\n 4. Electricity, gas, and<\/p>\n
drinking water 7,586.3 5,413.9 10,448.6 5,295.3
\n 5. Construction 47,012.9 35,036.9 51,873.6 22,619.8
\n 6. Trade, hotel and restaurant 104,432.9 73,160.5 140,426.9 57,490.4
\n 7. Transportation and<\/p>\n
communication 42,231.8 32,204.1 55,247.5 28,481.3
\n 8. Finance, rentals and<\/p>\n
company services 49,564.8 39,184.0 93,134.4 31,903.0
\n 9. Services 53,837.3 37,723.8 63,126.1 35,773.8<\/p>\n
Gross Domestic Product 624,337.1 433,685.2 951,385.9 377,027.6
\n GDP excluding oil\/gas 570,627.8 399,458.7 850,663.1 343,041.1<\/p>\n
Source: Central Bureau of Statistics<\/p>\n
Table III: Per capita GDP and GNP, 1997 and 1998 at current prices<\/p>\n
1997 1998<\/p>\n
Rupiah US$ Rupiah US$
\n ----------------------------------------------------------------------
\n 1. Per capita GDP 3,123,763 1,088.7 4,689,564 449.2
\n 2. Per capita GNP 3,028,112 1,055.4 4,555,004 436.3
\n 3. Average Rupiah\/$ exchange rate 2,869 10,439<\/p>\n
Source: Central Bureau of Statistics<\/p>\n
Table IV: Gross Domestic Product by aggregate demand (in billion rupiah)<\/p>\n
1997 1998<\/p>\n
Amount % Amount %
\n ----------------------------------------------------------------------
\n 1. Household expenditure 388,255.1 62.19 665,210.7 69.92
\n 2. Government expenditure 42,952.0 6.88 43,654.9 4.59
\n 3. Fix gross domestic<\/p>\n
capital formation 179,269.2 28.71 185,051.3 19.45
\n 4. Stock formation *) 20,979.3 3.36 37,408.2 3.93
\n 5. Exports of goods and services 175,310.2 28.08 282,681.8 29.71
\n 6. Minus imports of<\/p>\n
goods and services (182,428.7) (29.22) (262,621.0) (27.60)<\/p>\n
Gross Domestic Product 624,337.1 100.00 951,385.9 100.00<\/p>\n
Source: Central Bureau of Statistics<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/economy-shrinks-for-first-time-in-30-years-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }