Domestic demand leads economic recovery

Higher GOP Growth According to the Central Bureau of Statistics (BPS), Indonesia's GDP growth rate in January-March 2002 against the year-ago level was 2.47%. This figure turned out to be lower than the 3.2% that Bank Indonesia (BI) had anticipated. Nevertheless, the BPS is optimistic that the annual

GDP growth rate will surpass 3.3%, the actual result in the preceding year. The Indonesian government estimates the annual growth rate at 4% and the inflation rate at 9% for fiscal 2002. Furthermore, the Indonesian government assumes the GDP growth rate at 4-6% and the inflation rate at 7-9% in its state budget bill for fiscal 2003. BI expects the GDP growth rate of 4.2-5.2% and the inflation of 5-10% in 2003 against the preceding year, respectively. Indonesia's GDP growth rate turned from negative 13.2% in 1998 to positive 0.31% in 1999 and recovered up to 4.8% in 2000. Nevertheless, Indonesia's GDP growth rate in 2001 tumbled down to 3.3% because of the global business slump resulting from the collapse of the IT (Information Technology) bubble economy in the U.S. as well as the effects arising from the September 11 terrorist attacks and the Afghanistan war,