Economic data underestimates real conditions, says CSFB

Economic data underestimates real conditions, says CSFB

JAKARTA (JP): London-based investment bank Credit Suisse First
Boston (CSFB) claims Indonesia's official economic data does not
reflect the real conditions of the country's improved economic
activities.

In its latest issue of "Emerging Markets Economics Research"
on the Indonesia Economic Outlook section, CSFB said in general
they were more optimistic than what was said by the country's
current official economic data following the economic crisis.

"We are more convinced than ever that the official data
exaggerated the extent of the downturn in Indonesia," the report
said.

The report was released on Wednesday at the media briefing
during the four-day international investor forum sponsored by the
CSFB in cooperation with state-owned PT Danareksa Sekuritas.

The forum -- held from Monday through Thursday -- invited some
50 overseas fund managers to meet with Indonesian corporate
leaders and government officials and to assess investment
opportunities in Indonesia.

In the report, CSFB said private consumption had picked up as
was evident in motorcycle sales which grew 55 percent to 34,585
from the previous year ending in May.

Cement consumption for the period of January through May had
also begun to rise and was running at about 74 percent of the
pre-crisis level (January-May period in 1997), according to the
report.

"Cash transactions are difficult to track, and can be missed
by official statistics," the report said, adding this was one
reason why it suspected that the level of economic activity had
been understated by the official data.

The company's executive Neil Harvey, commenting on Indonesia's
interest rate downturn trend and rupiah appreciation, said he was
optimistic that the country would have a lot more debt
restructuring deals ahead.

Lowered interest rates give incentives to corporations to
restructure debt, while bankers see improving credit worthiness
in their borrowers, Neil said.

He said, however, the debt restructuring in the state bank
sector was too slow compared to the private bank sector.

"State banks have a larger scale of problems in which they
extended loans in much bigger sums and to more uncooperative
parties," he said.(udi)