Jakarta – Indonesia's economy grew 4.77 percent last year but is likely to slow to around four percent this year, the government said Tuesday.
The full year growth in gross domestic product (GDP) last year was despite a 0.72 percent quarter-on-quarter contraction in the last three months of 2000.
"Economic performance in the fourth quarter declined in line with the trend of the previous year," Central Bureau of Statistics chief Sudarti Surbakti said.
Subakti was referring to a similar pattern of contraction in the last quarter of 1999, when GDP rose just 0.23 percent for the whole year.
The economy contracted by 14 percent in 1998 at the height of the regional financial crisis, and the 2000 figures have been hailed by some as the first sign of real recovery.
Kusmadi Saleh, deputy chairman of the bureau said the 2000 growth was "mainly driven by investment and exports."
But Saleh warned that growth momentum was unlikely to be sustained and was forecast to slow to around 4.0 percent in 2001.
"I'm still concerned with the current [political] situation. We expect GDP to still grow, but it will not be as good as last year," Saleh said.
He said a number of factors were causing concern, including the level of output, which is still below capacity, slow growth of foreign investment, difficult social and political conditions, and a forecast decline in agricultural production, due to climatic conditions.
Surbakti attributed the negative growth in fourth quarter of 2000 to "the sharp fall in agriculture output." She said agriculture output in the three months to December declined 12.55 percent from the previous quarter.
The central Bank Indonesia said separately it expected a GDP growth of 4-5 percent in 2001.
However, while imports and investment will continue to strengthen in line with the ongoing economic recovery, exports will slow down later in the year, the bank said.
Analysts were mixed in their own forecasts for 2001 – with Merrill Lynch expecting growth of 3.7 percent and GK Goh Stockbrokers forecasting around 4.6 percent.
Merrill Lynch Indonesia head of research Heriyanto Irawan said their low forecast was based primarily on the expectation of slower growth in exports.
The contraction in fourth quarter GDP was largely due to a decline in exports, he said, adding that the growth rate for electronics and machinery exports, which was more than 100 per cent last year, was likely to slow.
The steep fall in the agricultural sector seemed to be related to the export slowdown, he added.
GK Goh Stockbrokers regional economist Song Seng Wun said last year's growth showed that domestic consumption was largely driving the economy, while exports, although important, contributed only around 35 percent of GDP. "Indonesia's export-to-GDP ratio is the lowest among the ASEAN countries," he said.