Government targets below 5% growth in 2002

JAKARTA (JP): Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti said on Thursday that the government was targeting gross domestic product (GDP) growth of just below 5 percent in the next fiscal year.

"In discussing the assumption of the state budget, we estimate it will be difficult to achieve economic growth above 5 percent next year," Dorodjatun said after a Cabinet meeting.

This year's growth is targeted at 3.5 percent.

He said the government wanted to achieve higher economic growth so that it could create more job opportunities and revive investor confidence in the country's economy.

Dorodjatun said Indonesia had to also improve its credit rating from non-investment grade (ccc+) to investment grade (bbb+) if it wanted to draw more foreign investment.

"Hopefully, we can improve the rating within the next three to six months," said Dorodjatun, who was accompanied by Coordinating Minister for Peoples' Welfare Jusuf Kalla and Minister of Foreign Affairs Hassan Wirayuda.

Dorodjatun said the government would do its best to control the inflation rate. "Ideally, it (the inflation rate) should be below 10 percent."

Inflation is currently sitting at 13 percent year-on-year.

Dorodjatun said the Cabinet meeting also discussed possible ways on how the budget could allow the government to adjust fiscal and monetary policies.

The government, according to Dorodjatun, would continue working to cut the country's budget deficit in order to reduce its dependency on sovereign loans.

Separately, Minister of Finance Boediono said on Thursday that the government was considering a stronger rupiah exchange rate of between Rp 8,000 and Rp 9,000 to the U.S. dollar for the 2002 budget, compared to Rp 9,600 set for the 2001 budget.

The government is scheduled to present economic assumptions for the 2002 state budget in early September. (dja/03)