IMF still upbeat on RI growth

IMF still upbeat on RI growth

The Jakarta Post, Jakarta

The International Monetary Fund said on Thursday that the
country's economy could still grow by between 3.5 percent and 4
percent this year, despite slower-than-expected first quarter
growth.

The Central Bureau of Statistics (BPS) announced on Wednesday
that the economy grew by 2.47 percent in the first quarter of
this year compared to the same period of last year. The growth
rate was lower than most experts had expected.

"It's lower than people expected but we still feel that growth
of 3.5 percent to 4 percent is possible this year," IMF senior
advisor for Asia Pacific Daniel Citrin was quoted by Reuters as
saying.

The government has targeted 4 percent economic growth for this
year compared to 3.2 percent last year.

Citrin said weak first quarter growth was partly due to severe
floods in February, an area where the impact should be temporary.

"Hopefully we'll see recovery in the second quarter," he said.

Citrin is leading an IMF special mission to conduct a regular
review of the country's performance in the implementation of the
economic reform program sponsored by the Fund under a US$5
billion loan program.

Bank Indonesia, which initially predicted 3.2 percent first
quarter growth, has also expressed confidence that the economy
could still grow by between 3.5 percent and 4 percent this year.

"I think we'll grow faster in the second quarter and the
target of 3.5 percent to 4 percent growth is expected to be met,"
Bank Indonesia deputy governor Miranda Goeltom said.

First quarter economic growth was mainly driven by higher
consumer spending, as exports slowed down due to the global
economic downturn.

The Fund said earlier that Indonesia's macroeconomic
indicators had been making encouraging progress in the first
couple of months of the year as shown by the firmer rupiah
against the U.S. dollar and a falling key interest rate.

Separately, Coordinating Minister for the Economy Dorodjatun
Kuntjoro-Tjakti was quoted by Antara as saying that inflation
could hit 13 percent this year, compared to the 2002 state budget
assumption of 9 percent, unless the government took measures to
limit the upward pressure on prices.

Speaking to reporters following a Cabinet meeting, Dorodjatun
said that the government would try to ensure stability in rice
supplies and distribution to prevent prices from surging ahead.

"At the (cabinet) meeting, we talked about the necessity of
staying alert ... We must keep a close eye on the supply of rice.
We don't want to see inflation run out of control because of food
problems," he said.