GDP falls 8.51% in first quarter

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)