Economic growth revised downwards for 2002

Ahmad Junaidi, The Jakarta Post, Jakarta

The city administration announced on Friday that the recent Bali bombing tragedy has affected the city's economic growth, and has forced a revision from the previously estimated 3.87 percent to between 3.5 percent and 3.7 percent this year.

"There will be a greater impact on next year's economic growth," city administration spokesman Muhayat told reporters at City Hall, revealing the results of an analysis made by the City Office of the Central Bureau of Statistics.

Muhayat said due to the tragedy, which occurred on Oct. 12 and claimed the lives of more 190 people, the city has also had to revise the expected economic growth next year, down from 4.03 percent to between 3.4 percent and 3.9 percent.

He said the growth of the trade, hotel and restaurant industries was predicted at 5.4 percent, but as a result of the Bali tragedy they would only grow by between 4.57 percent and 5.05 percent this year.

According to the bureau, the number of foreign tourists was earlier predicted to reach 1.3 million and had reached 914,742 visitors to the country by September. It is now expected that the number of tourists will decrease by 7.7 percent.

The bureau predicts that the number of foreign tourists would increase slightly to between 1.2 million people and 1.25 million people next year although some countries, including the United States, have issued travel warnings to Indonesia. It said that the most of the tourists visiting Jakarta were from Asian countries that have not issued travel warnings.

While the number of foreign tourists were estimated to decrease, domestic tourists to Jakarta were predicted to increase from 6.66 million people this year to 6.83 million people next year, and to 6.99 million people in 2004.

The administration predicted that the revenue from hotels and restaurants would not decrease next year, since about 75 percent of tourists to Jakarta are locals. This year, the city has estimated that they will secure Rp 470 billion in taxes from hotels, restaurants and entertainment centers.

Muhayat also said that government spending and public consumption contributed up to 64 percent of the city's economic growth and as such, this year's economic program, called the Subdistricts Residents' Empowerment (PPMK), was developed to help increase people's buying power.

Household consumption is predicted to increase by between 4.92 percent and 5.01 percent next year, and between 4.67 percent and 4.76 percent in 2004; while government spending was predicted to rise by between 3.95 percent and 4.02 percent next year, and between 4.06 percent to 4.14 percent in 2004.

As of October, inflation in the city had reached 6.7 percent and it was predicted to reach between 9.5 percent and 10 percent this year due to the seasonal holidays of Idul Fitri, Christmas, and New Year's.