Jakarta – The country's property sector is predicted to show a healthy growth in 2001 if the economy continues to be on the right track to recovery.

Property observer Panangian Simanjutak said the property sector would grow 4.5% this year and 7% in 2001. Last year the sector still suffer a contraction of 10%.

Simanjuntak said the process toward recovery began in September 1999 starting by the hotel sector.

Leading property developer Ciputra said house transactions would increase 50% this year and the property industry would return to a normal condition in 2001.

Observers made their predictions based on the projection that the country's economy would improve starting this year, when the country's gross domestic products (GDP) is forecast to expand 2%-3.5% and inflation would be between 4% and 6% and the rupiah exchange rate would be stable at Rp6,000-Rp7,000 per US dollar.

Last year the country's economy was estimated to suffer a contraction of 2.1%.

When the country's economy contracted 13.8% in 1998, the property sector shrank by 37.9%. A positive growth is predicted to start this year by 4.5%. Boom is predicted in the property sector in 2003 and 2004 when the sector expand by 10% and 12% respectively.