Jakarta – Indonesia told international creditors yesterday that its efforts to turn around the sickly economy were bearing fruit, and the creditors largely agreed.

This took place a day after Indonesia promised the International Monetary Fund in a new letter of intent that it will push through reforms in return for a US$340 million loan.

Top economics minister Dorodjatun Kuntjoro-Jakti said yesterday that the economy has improved markedly since President Megawati Sukarnoputri came to power last July.

"I think we can truthfully say that we are now seeing the first fruits of the changes that this government has been able to implement over the past ten months," he said in remarks to open the mid-year review of the Consultative Group on Indonesia (CGI), the country's major international creditors. Last November, the CGI pledged US$3.14 billion in fresh loans for the cash-strapped country's 2002 Budget.

Mr Kuntjoro-Jakti said economic growth rose to 2.5 per cent in the first quarter of this year from 1.6 per cent in the fourth quarter of 2001 and inflation continued to fall.

The rupiah has strengthened by more than 17 per cent since November and almost 28 per cent from the last days of the government of president Abdurrahman Wahid. Non-oil exports and imports in April also rose by 6 per cent and 10 per cent respectively.