Economy 'still sound despite campaigns'

JAKARTA (JP): Campaigning for the May 29 election has had no effect on Indonesia's economy, Minister of Information Harmoko announced.

Speaking after attending Wednesday's monthly meeting of finance and economic ministers at the presidential office, Harmoko said that despite the election campaign, Indonesia's capital markets remained sound.

"It was reported (in the meeting) that the country's monetary and financial development was sound, so it was concluded that our economic situation was quite good," he said.

As an indication of this, he said, foreign exchange reserves held by the central bank reached a record of US$20.4 billion last month, which was sufficient to finance 5.3 months of imports.

In comparison, foreign exchange reserves in June 1993, were $12.1 billion.

Analysts earlier predicted that the campaign, which started on April 27, would have a short-term effect on the economy especially on foreign currency and stock trading activities.

Harmoko said that the inflation rate in April was checked at 0.56 percent, lower than the 0.78 percent recorded in April last year.

As a result, the accumulative inflation rate for the January- April period this year was 2.52 percent, lower than the 4.04 percent recorded during the corresponding period last year.

Food prices last month rose by 0.01 percent from April 1996, housing prices increased by 0.96 percent, clothing went up by 0.07 percent while various goods and services increased by 0.9 percent.

Harmoko said that Indonesia's exports in February exceeded $4.42 billion, consisting of oil and gas worth $1.4 billion and non-oil and gas products valued at $3.02 billion.

Total exports for February were down 4.4 percent from January but up 10.1 percent from February last year.

Imports in February topped $3.09 billion, consisting of oil and gas imports of $290 million and non-oil and gas imports of $2.8 billion.

Total imports were down 15.7 percent from January but up 7.8 percent from February last year.

"So for February this year, we managed to post a trade surplus of $964.3 million," Harmoko said. This was a 67.6-percent increase from January and an 18.3-percent rise compared to February last year.

For the April 1996 to February 1997 period, Indonesia's exports exceeded $46.87 billion while imports stood at $40.07 billion, giving a trade surplus of $6.8 billion.

Harmoko said Wednesday's cabinet meeting also discussed the performance of Indonesia's 10 leading export commodities.

During the April-January period, textile exports went up by 5.96 percent; processed wood products by 7.8 percent; electronic goods by 38.86 percent; leather, leather goods and footwear by 4.93 percent; steel, machinery and automotive products by 5.83 percent; processed coconut or palm oil by 12.74 percent; food and drinks by 21.11 percent; and basic chemical products by 10.94 percent.

Commodities whose exports declined during that period were rubber, which was down 0.57 percent and pulp and paper, which dropped by 5.84 percent.

"The drop in pulp and paper exports is mainly due to a surplus of pulp on the world market," Harmoko said. (pwn)