2nd quarter GDP surprising BPS report

2nd quarter GDP surprising BPS report

JAKARTA (JP): The economy grew by a surprising 3.52 percent in
the second quarter of this year compared to the same period last
year, despite a world economic slowdown and domestic political
problems.

The Central Bureau of Statistics (BPS) reported on Wednesday
that, on a quarter-to-quarter basis, the economy, as measured in
gross domestic product (GDP), expanded by 0.18 percent in the
second quarter compared to the first quarter.

"The growth, although quite insignificant in quantity, is
surprising given that usually the figure has been negative for
the second quarter," Kusmadi said at a media conference.

BPS said that at second quarter current prices, GDP was equal
to Rp 366.5 trillion (about US$43.3 billion), while based on 1993
constant prices, GDP was Rp 101.9 trillion.

Analysts said that the second quarter GDP data was higher than
market expectations.

"It is not a bad figure considering the current global
economic slowdown," said Ferry Latuhihin of Danareksa Research
Institute.

He said that the country's second quarter GDP growth was even
higher compared to its peers in the region, as the growth was
based on a relatively low base.

However, Ferry said that Danareksa still maintained its
initial full-year GDP projection of between 3.5 percent and 4
percent as the impact of the slowdown in the major world
economies would be greater in the second half of the year.

The government has targeted the economy to grow by 3.5 percent
this year, a decrease compared to the 4.8 percent growth
registered in 2000.

The world economic slowdown is expected to cause the country's
exports to decline, and this will affect economic growth as well.

BPS said that six sectors contributed to the second quarter
growth, while three other sectors contracted.

The agriculture sector contracted by 4.59 percent in the
second quarter compared to the first quarter due to the end of
the harvest season, while the mining sector and transportation
and communications contracted by 0.20 percent and 0.46 percent
respectively.

The mining sector, meanwhile, grew by 2.01 percent;
electricity, gas and water industries by 6.39 percent;
construction 0.90 percent; trade, hotel and restaurant 0.99
percent; finance 0.60 percent; and the services sector 1.45
percent.

BPS said that on an annualized basis, which excludes seasonal
factors, all sectors of the economy expanded in the second
quarter.

It said that the agriculture sector grew by 1.33 percent,
mining 2.26 percent, manufacturing 4.75 percent, electricity-gas-
water 9.85 percent, construction 0.96 percent, trade-hotel-
restaurant 5.27 percent, transportation-communications 6.13
percent, finance 2.41 percent and services 1.63 percent.

On the demand side, BPS said that household consumption
expanded by 0.16 percent, government spending 3.84 percent,
investment 4.37 percent, exports 3.30 percent and imports 0.08
percent.

BPS added that it had revised the first quarter GDP growth to
1.81 percent on a quarter-to-quarter basis from 2.63 percent as
initially reported, and to 3.21 percent year-on-year from 4.01
percent.

"We made the revision because, when it was announced, some
data was not included in the GDP calculation," Kusmadi said.

With the revision, the bureau said the economy grew by 3.37
percent in the first semester of this year compared to the same
period last year.

Confidence

Meanwhile, BPS said that between April and June this year,
business confidence rose 4 percent to 111.75 points, compared to
the 107.73 between January and March.

The index was processed by BPS in a quarterly survey of
companies and business people in Greater Jakarta and Surabaya,
based on the number of business orders, earnings, the prospect of
increasing the volume of work, and production utility, Kusmadi
said.

"A figure above 100 means that businesses are optimistic,
while below 100 shows a pessimistic view," he explained.

BPS said that it expected an increase in business confidence
during the next quarter to 112.99, as economic conditions
continue to improve.

However, the second quarter consumer confidence index declined
slightly to 104.1 compared to the 110.52 in the first quarter of
this year, and was expected to continue to drop during the next
three months to 94.85.

The drop was caused by a pessimistic outlook for household
earnings, inflation and the purchase of durable goods, BPS
said.(tnt)