RI`s first-semester economy grows 6.04%: finance ministry

Jakarta (Antara News) - Indonesia`s economy is estimated to have grown by 6.04 percent in the first half of 2007 on improving economic conditions in June, the Finance Ministry said.

"Economic growth hit six-month highs in June. This is very convincing and provides a conducive climate," Anggito Abimanyu, head of the ministry`s fiscal policy board, said here Thursday.

With the economy expected to expand in the range of 6-6.1 percent in the second quarter, the government was optimistic about the economy growing by 6.3 percent as projected, he said.

Looking ahead, the Finance Ministry saw the economy in the third and fourth quarters expanding by 6.3 percent and 6.5 percent respectively.

"The real sector showed signs of very positive development in June 2007. Tax receipts grew 50 percent on-year in June. Overall, tax receipts in the first semester grew 20.8 percent," he said.

Data from the fiscal policy board show public consumption in the second quarter grew by 4.9 percent contributed to by a car sales growth of 7.46 percent, motorcycle sales 61.9 percent, electrical power consumption 8.2 percent, consumer credit 18 percent, value added tax on resident taxpayers 20 percent and value added tax on imports 28 percent.

Government consumption meanwhile grew 8.9 percent with state employee expenditure contributing 55.8 percent, goods expenditure 10.1 percent, and other spending 47.2 percent and regional spending minus 4.9 percent.

The board also noted that foreign investment grew 11 percent and domestic investment 444 percent in the second quarter. Overall, investment grew 11 percent over the period.

Exports rose by 9.4 percent, and imports 11.99 percent. Overall, exports and imports in the first semester grew 15 percent and 12 percent respectively, he said.

He said inflation was expected to fall short of the government`s target of 6.5 percent to 6 percent owing to a decline in the rice price and the government`s decision to raise export on crude palm oil which was expected to keep down cooking oil prices. (*)
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