GDP grows faster at 5.03% in third quarter, says BPS
GDP grows faster at 5.03% in third quarter, says BPS
Leony Aurora , The Jakarta Post, Jakarta
The year 2004 has been a good one for Imelda Ladianto. She was
accepted as a teacher by a national plus school, rented a small
house, and could officially call herself independent.
"The first thing I bought was a washing machine," said the 26-
year-old. "I didn't want to hand wash my laundry, it's way too
impractical," she added.
Imelda pays for her precious washing machine in monthly
installments of Rp 229,000 (US$25.58) for one year. "I got it on
credit, otherwise I couldn't afford it," she confessed.
Cheaper credit amid low interest rates offered by banks
benefits not only consumers like Imelda, but boosts domestic
spending -- which contributed more than 65 percent to the
country's Rp 422.9 trillion gross domestic product (GDP) in the
third quarter of the year -- and promotes growth.
GDP in Indonesia grew faster at 5.03 percent in the third
quarter of the year compared to the same period in 2003, the
Central Statistics Agency (BPS) reported on Friday.
Consumer spending continues to be a significant contributor to
GDP -- the value of all goods and services produced in an economy
-- as it expanded 5.09 percent from the same quarter of last
year.
This year's third-quarter consumer spending figure is slightly
lower than the 5.26 percent growth recorded in the second quarter
and 5.71 percent in the first.
A giant leap is shown in the exports sector, which expanded
almost 20 percent in the third quarter, due to soaring oil prices
and increasing export volumes. The second and first quarter only
recorded 0.85 percent and 3.07 percent growth respectively.
The agency has predicted that the worth of Indonesia's exports
will hit $65 billion this year, up 6.5 percent from the previous
year.
Government spending decreased by 2.74 percent in the third
quarter of the year, compared to the third quarter of last year.
Cumulatively, in the first nine months of the year, the
country's GDP expanded by 4.89 percent. Such growth exceeds the
government's estimate of 4.8 percent for 2004.
Despite the steady increase demonstrated by the quarterly GDP,
there is still a possibility that the target will not be reached.
"The trend shown by records from 2000 is that growth in the
fourth quarter tends to slow down," said the agency's deputy
chairman of economic statistics, Slamet Mukeno.
Earlier this month, the World Bank revised its forecast for
Indonesia's growth in 2004 to 4.9 percent, from 4.5 percent
previously, after witnessing steady growth and the declining rate
of unemployment in this year's first semester, as well as a
peaceful election.
The bank also increased its forecast for 2005 from 5 percent
to 5.4 percent, equal to what the government has targeted.
However, it pointed out that Indonesia's investment climate
remains weak as compared to regional competitors. Overseas
investors have steered clear of the country due to security
concerns, red tape, labor issues and the lack of legal certainty.
As of October, foreign-funded projects increased to 969 from
876 during the same period of last year, while foreign direct
investment approvals fell to $8.85 billion from $9.94 billion.
The BPS recorded that investment in the third quarter grew by
13 percent compared with the same period of last year, driven by
domestic investment.
In the meantime, with Idul Fitri two weeks ago and Christmas
fast approaching, the country will again rely on consumption to
fuel its growth in the fourth quarter.
"I'm thinking of buying a television set for myself for
Christmas," said Imelda. "A 14-inch one would be nice."