Government expects GDP to grow 3%

Government expects GDP to grow 3%

JAKARTA (JP): Finance minister Bambang Sudibyo said on Monday
the economy was expected to grow by 3 percent in 2000, lower than
the 4 percent forecast made by the Central Bureau of Statistics
(BPS) last week.

Bambang said that based on the 1993 constant prices, the
country's real gross domestic product (GDP) was expected to grow
to Rp 387.4 trillion (US$53 billion) in 2000 from Rp 376.1
trillion in 1999.

"The real GDP growth in 2000 is expected to be around 3
percent," he told the House of Representatives Commission IX for
financial and development planning affairs.

He added that GDP would grow by 3.8 percent in the April 2000
-December 2000 budget year.

The bureau announced last week that GDP grew by 0.23 percent
last year, compared to a contraction of almost 14 percent in
1998.

It said strong fourth quarter growth led by household
consumption and government spending had been the major factor
behind the economy's push into the black.

It was optimistic the economy would grow by 4 percent this
year as the bank and corporate restructuring programs gain
momentum.

Excise tax

Meanwhile, director general of customs and excise Permana
Agung said the government would delay the implementation of the
new excise tax policy on cement, tires and soft drinks.

"We'll not impose the excise tax on April 1 because we have to
discuss it again with the related industries," he told reporters
on the sidelines of the hearing session.

Permana recently told the House the government was considering
imposing excise tax on the three products in a bid to raise
around Rp 2 trillion to help finance the April-December 2000
state budget.

He said that cement for low-cost housing and tires for public
transport vehicles would be exempted from the excise tax.

Permana declined to disclose the level of the excise tax.

But he said the government would proceed with the plans to
increase the excise tax on cigarettes on April 1 but did not give
further details.

The excise taxes on cigarettes currently range from 20 percent
to 36 percent.

So far the government has only imposed excise taxes on
cigarettes and alcohol.

Separately, the Indonesian Association of Soft Drink Producers
visited the House's commission IX on Monday to lobby the
legislators to delay the new excise tax policy due to the current
economic situation.

Chairman of the association Mugijanto said imposing excise
taxes on soft drinks amid soaring production costs would badly
hurt the local soft drinks industry.

He pointed out that even without the planned excise tax, soft
drinks had been adversely affected by the reimposition of import
duty on sugar, and increases in electricity tariffs and wages
beginning in April. (rei)