Economic growth revised downwards for 2002

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.