GDP falls 8.51% in first quarter

JAKARTA (JP): Indonesia's economy contracted by 8.51 percent in the first quarter of 1998, the Central Bureau of Statistics said yesterday.

Sugito Suwito, the agency's chairman, also predicted that gross domestic product (GDP) would shrink by 10.1 percent this year, compared to the government's prediction in April that the economy would contract by 5 percent this year.

This is the first time that the government's statistics agency has published quarterly figures for GDP growth rates. In the past, the government published the annual GDP figures as part of the president's state of the nation address in August.

The GDP figure is calculated based on 1993 constant prices.

The agency said the construction sector was the worst hit by the recession, contracting by 27.16 percent. The manufacturing sector followed with 18.58 percent, trade, hotels and restaurants (14.38 percent), financial services (11.1 percent), mining (9.65 percent), other services (3.7 percent) and transportation and communications (2.5 percent).

Only agriculture and utilities (electricity, gas and clean water) booked positive growth during the first quarter, respectively by 28.47 and 7.1 percents.

The agency said Indonesia's month-on-month inflation rate rose 05.24 percent in May, bringing the total increase in the consumer price index to 40.06 percent in the first five months of 1998.

Sugito predicted that inflation would reach 80 percent to 85 percent this year, contingent on an absence of extraordinary happenings such as last month's massive rioting in Jakarta and other cities. "But if something like rioting happens again, inflation could surpass the 100 percent level," he warned.

Sugito said the main driver of inflation during the first five months of this year was the prolonged monetary crisis, compounded by bad farm harvests and increasing fuel prices.

Interruptions and breakdowns in the distribution network, especially because of the unrest in Jakarta and other cities last month, also contributed to the high inflation rate for May.

Food prices rose 3.90 percent, processed food and cigarette prices 4.00 percent, housing prices increased 4.14 percent, clothing 4.53 percent, health 2.4 percent and education and recreation 1.41 percent. Transportation and communication costs shot up 17.25 percent.

On international trade, the bureau said Indonesia booked a surplus of US$5.09 billion during the first quarter of this year, with exports reaching $12.29 billion and imports $7.2 billion.

Exports declined by 0.9 percent during the first quarter of this year to $12.29 billion, with non-oil exports rising 9.5 percent to $10.02 billion and oil and gas exports falling 30.17 percent to $2.27 billion.

Meanwhile, imports reached $7.2 billion, with non-oil imports totaling $6.2 billion, oil and gas $990 million. (rid)