GDP forecast by BPS too low: Experts
GDP forecast by BPS too low: Experts
JAKARTA (JP): Experts have unanimously disagreed with the
Central Bureau of Statistics (BPS) over its extremely low 1.5
percent gross domestic product (GDP) forecast for 2000.
Head of the State Logistics Agency (Bulog) Rizal Ramli said on
Tuesday the country was on track to reach economic growth of more
than 4 percent this year.
He said the current weakening of the rupiah to the U.S. dollar
was only temporary and due to a combination of external and
domestic factors.
"The new BPS forecast is too extreme ... We have to question
how the GDP will drop to such a low level," Rizal, former senior
analyst at the Econit consulting company, said on the sidelines
of a seminar on the economy.
Tony A. Prasetiantono also disagreed with the agency.
"BPS was too premature in making the forecast. The forecast
is too pessimistic ... I regret it because it would only create
more uncertainty."
Tony said that on the positive side, the BPS figure could be
considered a warning to the government to immediately resolve
domestic political and security problems, and to proceed with
economic reform programs to help shore up the rupiah.
He was optimistic the government's GDP target of 3.8 percent
this year would be attainable.
BPS chief Sugito Suwito said on Monday the bureau would revise
down this year's GDP growth forecast to 1.5 percent from the
initial target of 4 percent due to continuing political
instability which was hampering the economic recovery process and
putting pressure on the local currency.
"BPS will have to revise the country's whole year growth
forecast from 4 percent to as low as 1.5 percent should the
worst-case scenario apply," he said.
The country's economy contracted more than 13 percent in 1998
and posted tiny positive growth last year in the wake of a
regional economic crisis that started in the middle of 1997.
Stability in the exchange rate of the rupiah against the U.S.
dollar is seen as a key factor for the economic recovery.
The government assumes an exchange rate level of Rp 7,000 per
U.S. dollar this year.
The local unit has now plunged to a seven-month low of around
Rp 8,540 per dollar.
The government and the central bank have said that the
weakening of the local currency was temporary and due to domestic
economic and political uncertainty.
The Asian Development Bank (ADB) is also maintaining its 2000
GDP growth forecast for Indonesia of 4 percent.
ADB Indonesia resident mission chief Robert C. May also said
on Tuesday the prediction from BPS appeared overly pessimistic.
"BPS had a pessimistic prediction, it's the worst-case
scenario. I think at this moment we'd stay with our earlier
(March) prediction. I think the 4 percent growth is still
possible to be achieved," May said on the sidelines of a seminar.
He said predicted GDP growth would be realized if the country
remained consistent with its economic reform program.
Meanwhile, Rizal said the government expected exports to
become the second primary contributor to this year's economic
growth after consumption.
He said the weakening of the rupiah should help boost the
competitiveness of the country's export products.
Rizal said the government would strive too encourage the
lending of excess liquidity in banks to increase the utilization
of the country's production capacity from the current 60 percent
level.
He said the President instructed related ministers and
government institutions to resolve the problem of exports held up
at the country's shipping ports. (rei/cst)