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Indonesia’s Per Capita today is US$ 1,500, up from US$ 600 post Asian Crisis


Monday August 14, 2006

Indonesia’s per capita income has topped $1,500, said the Central Statistics Agency (BPS) on 2 August, thus technically lifting the country to lower-middle income status, reports Indonesia’s Trade and Investment News

Agency Head Rusman Heriawan told reporters that the figure marked a considerable improvement ( or two and a half times increase) over the depth of the financial crisis, when per capita income fell as low as $600 at one stage. The stronger Rupiah, which now hovers around Rp. 9,100 against the US Dollar, has helped lift
’s Per Capita income. 

H
is comment followed another reduction in inflation to 0.45% for the month, or 15.15% year-on-year. 

On the other hand, Indonesia’s trade surplus dropped to $2.81 billion in June from $3.28 billion in May as imports grew faster than exports during the month, Heriawan said, while exports hit a new record of $8.48 billion in June, 1.70% up on May's $8.34 billion. 

Imports, often seen as an indication of capital goods imports for manufacturers, picked up by 12% pct to $5.67 billion in June from $5.06 billion in May. 

"Inflation in
is on a downward trend," Deputy Governor of Bank , Miranda Gultom told reporters. "Inflation has been declining faster than expected and therefore there is a very big possibility of easing monetary policy." 

At the end of July, Vice President Jusuf Kalla said the government hoped that in the last semester inflation will return to single digit, or more or less, so that consumer spending and purchasing power as well as production can return to normal levels, reported Indonesia’s Trade and Industry News issued by the Coordinating Ministry for the Economy. 

The lower inflation rate also helped boost confidence among business operators. The Business Sentiment Index (BSI) edged higher by 0.4% in the April-May period to 114.5, reported The Jakarta Post.  Of the eight business sectors covered by the survey, business sentiment improved the most in the construction sector (up 2.6% to 114.9) and the financial sector (up 1.6% to 129.4). 

Vice President Kalla further said that lower rates were also producing an upswing in the industrial sector. While growth rates would not be as high as the government had hoped, but there are clear signs that output will increase in the second half. The government  predicted growth of 7.7% in the sector. 

Indeed, in the latest developments, on Tuesday, 1 August, as expected, Bank
reduced its BI interest rate by 50 base points to 11.75% from the earlier 12.25%.