RI's GDP may shrink 4.1% in 1999: Poll<\/p>\n
JAKARTA (Reuters): Indonesia's gross domestic product (GDP) is
\nforecast to shrink a further 4.13 percent this year after
\nplunging 13.68 percent in 1998, according to a Reuters poll of 10
\nresearch houses.<\/p>\n
But its economy is forecast to recover in 2000, growing about
\n1.78 percent, according to the average forecast for that year.<\/p>\n
\"GDP would further contract this year as demand for goods and
\nservices would continue to fall, while investors would remain on
\nthe sidelines due to the political uncertainty,\" said economist
\nRaden Pardede of Danareksa Sekuritas.<\/p>\n
\"Growth is expected to return to positive next year. The
\nrupiah, which affects the supply side, would stabilise after the
\nelections, provided they run smoothly,\" the economist added.<\/p>\n
\"The upcoming elections are so important. We expect that the
\nelections would be smooth and fair, otherwise the impact on the
\neconomy would be devastating,\" said economist Budi Hikmat of
\nBahana Securities.<\/p>\n
Indonesia is to hold polls in June to elect parliamentary
\nmembers who will elect a president and a vice president around
\nNovember.<\/p>\n
The elections are among reforms aimed at setting the world's
\nfourth most populous nation on the path towards democracy after
\n32 years of autocratic rule under disgraced former president
\nSoeharto.<\/p>\n
Soeharto was replaced by his protege B.J. Habibie in May 1998,
\namid widespread civil unrest and the worst economic and social
\ncrisis in decades.<\/p>\n
The Central Bureau of Statistics has said GDP growth would be
\nbetween minus two percent and plus 1.5 percent in 1999. It has
\ngiven no forecast for 2000.<\/p>\n
In December, analysts forecast an average GDP contraction of
\n5.8 percent in 1999.<\/p>\n
They said they were now more optimistic because of the
\nrupiah's relative stability against the dollar over the past few
\nmonths.<\/p>\n
\"We have seen less rupiah volatility in the past few months
\ncompared with what had happened in the middle of last year,\" said
\none analyst who asked not to be named.<\/p>\n
\"This development had helped improve sentiment.\"<\/p>\n
Table A: Past GDP performance<\/p>\n
1994...........7.5%
\n 1995...........8.2%
\n 1996........,,,7.8%
\n 1997.......... 4.6%
\n 1998...minus 13.68%<\/p>\n
Table B: The results of the survey<\/p>\n
1999 2000
\n ING Baring Securities -4 2.1
\n Bahana Securities 0 to -2 4-5
\n Citibank, N.A. -3 0 to 1
\n G.K.Goh Ometraco -5.7 2.8
\n European brokerage -6.2 2.8
\n HSBC Securities -6 -0.3
\n Merrill Lynch Indonesia -3.4 1.5
\n Danareksa Sekuritas -3.2 1 to 2
\n Pentasena Arthasentosa -3.3 0.9
\n Warburg Dillon Read -5.5 1.5
\n ----------------------------------------------------
\n Average -4.13 1.78<\/p>",
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