Economy grew by 2.47% in first quarter
Economy grew by 2.47% in first quarter
Dadan Wijaksana, The Jakarta Post, Jakarta
The economy grew by 2.47 percent in the first three months of
2002 compared to the same period last year, fueled mainly by
strong consumer spending, the Central Bureau of Statistics (BPS)
reported on Wednesday.
Although the growth rate is lower than what most analysts had
predicted -- including Bank Indonesia, which foresaw a 3.2
percent growth -- optimism still remains that the government's
full-year target of 4 percent growth in gross domestic product
(GDP) can be achieved.
Bank Indonesia deputy governor Miranda Goeltom said the
economy would pick up faster in the coming quarter, still on the
back of strong consumer spending.
"I think we'll grow faster in the second quarter and the
target of 3.5 percent to 4 percent growth is expected to be met,"
Miranda said, referring to the central bank's full-year growth
forecast.
Standard Chartered Bank economist Fauzi Ichsan said that
although most analysts had been overly bullish on the first
quarter GDP figure, the actual growth figure was not bad.
"I think the overall picture is still good," he said, adding
that the government should be on track to meet its growth target
for the year as long as it could maintain political stability and
the pace of the economic reform program.
BPS also expressed optimism that this year's economic growth
would be better than last year's 3.2 percent.
"If the situation remains conducive, economic growth this year
could fare better than last year," said BPS deputy chief La Ode
Syafiuddin in a news conference.
BPS said that the GDP grew by 2.15 percent in the first
quarter from the fourth quarter of last year.
Indonesia's economic growth still hinges on consumer spending
as the current slump in the world's economy has been dragging
down the country's exports, while foreign direct investment
would remain low as the country has yet to address various
problems at home, including legal uncertainty, labor unrest and a
security problem.
Foreign direct investment approval was down 90 percent to
US$292 million in the first quarter of this year compared to
$2.44 billion in the same period last year, according to a report
from the Investment Coordinating Board (BKPM).
Reports of an improvement in investor confidence in the
country during the first quarter, analysts said, was mostly
dominated by portfolio investment as shown in the rising stock
market index and 10 percent rise in the value of the rupiah to
the U.S. dollar, considered to be one of the best performing
markets in the region.
Although the economy could grow by 4 percent this year, the
government is still facing an uphill task as the growth figure is
not sufficient to absorb the millions of unemployed people.
Experts have said that the country needs to have growth of
between 6 percent and 7 percent to be able to absorb the huge
unemployment.