Economy grew 3.47% in third quarter: BPS

Adianto P. Simamora, The Jakarta Post, Jakarta

The Central Bureau of Statistics (BPS) reported on Thursday that the economy, as measured by gross domestic product (GDP), grew by 3.47 percent in the third quarter of this year compared to the same period last year.

BPS said that, compared to the second quarter, GDP grew by 2.8 percent.

BPS chief Soedarti Surbakti said that full-year GDP growth would be in line with the government's target of 3.5 percent.

"With the third quarter performance, we are optimistic GDP growth will reach at least 3.5 percent this year," Surbakti said.

Some analysts had earlier predicted that 2001 economic growth would be below the government target, primarily due to the global economic slump worsened by the Sept. 11 terrorist attacks on the U.S..

The economic slowdown in developed countries, particularly the U.S. and Japan, will affect Indonesia's exports, because they were major markets influencing last year's 4.8 percent economic growth.

BPS said that, based on current prices, GDP was equal to Rp 1,101.4 trillion, while based on 2000 constant prices, GDP was Rp 1,290.7 trillion.

BPS said that the third quarter GDP growth was contributed to by consumption, government spending and exports.

BPS said that consumption grew by 7.12 percent in the third quarter compared to the same period last year, and 3.43 percent compared to the second quarter of this year.

The bureau said that government spending increased by 11.86 percent in the third quarter year-on-year, and 1.43 percent quarter-on-quarter.

It said that, while exports grew by 6.57 percent in the third quarter compared to the same period last year, they contracted by 7.13 percent when compared to the second quarter.

The drop in export performance reflected the fact that the global economic slump had affected the country's export sector.

BPS also said that investment activities dropped by 4.3 percent year-on-year, and 7.6 percent quarter-on-quarter.

The drop in investment activity is related to the ongoing economic problems at home, with the banking sector reluctant to provide credit and the prospect of slower export performance amid the global slump.

BPS also reported that business confidence in the fourth quarter was expected to decline due to various uncertainties.

The bureau's business confidence index between July and September this year stood at 105.36 points.

A reading above 100 means businesses are still optimistic about the economy, while below 100 indicates pessimism.

BPS deputy chief Kusmadi Saleh said that the index for the fourth quarter of this year may drop to 98.97.