Economy expanded 5.6% in 2005 February 20, 2006Posted by ekon in makroekonomi.
Indonesia’s economy expanded 5.6% in 2005 from the previous year, outpacing growth of 5.4% in 2004. However, the economy contracted in the fourth quarter of 2005 from the previous three months, as high inflation and heavy interest rates took their toll.
The economy contracted 2.18% in the October to December period from the previous quarter, data from the Central Bureau of Statistics (BPS) showed on Wednesday (15/2/06). That compares with growth of 2.87% in the third quarter from the second quarter.
Year on year, the economy expanded 4.9%, decelerating from 5.63% in the July to September period due to a variety of internal and external factors, BPS chief Choiril Maksum said.
The bureau said per capita income last year was $1,267, up from $1,120 in 2004.
Growth last year was partly driven by the transport and telecommunications sectors, which expanded on foreign investment, Reuters reported.
The transport and communications sector grew 10.78% in the fourth quarter from a year earlier compared with 12.87% growth in the previous quarter.
Based on industrial sectors, manufacturing grew 2.91% in the fourth quarter from a year earlier versus 5.59% growth in the previous quarter.
Private consumption grew 4.18% in the fourth quarter, slower than 4.43% in the third quarter.
Citibank economist Anton Gunawan said that to some extent, relatively strong consumption growth in the fourth quarter may have been spurred by the distribution of cash compensation to help ease the burden of the fuel price hike on the poorest families. The government paid Rp300,000 to each of 15.648 million households registered as poor in the last quarter of 2005.
Private consumption was the economy’s main driver, making up 65.41% of GDP in 2005 against 67.78% the year before. It expanded 3.95% for 2005, growing 4.18% year-on-year in the fourth quarter and rising 1.1% quarter-on-quarter.
Coordinating Minister for Economy Boediono meanwhile said that the government still aims to achieve economic growth of 6% to 7% in the medium term.
“Going forward, we will try to achieve higher growth by pushing up investment,” he was quoted as saying by XFN-Asia.
“I would say that compared to our neighbors, we did quite well given the difficulties we faced last year,” he said, referring to the oil price spike and the severe impact brought about by the December 2004 tsunami.
He said that to create jobs and reduce poverty, the economy has to grow by at least 6% to 7% over the medium term. “We are striving towards that direction,” he said.