Economic growth slow in year's first quarter

Tifa Asrianti ,  The Jakarta Post ,  Jakarta   |  Fri, 05/16/2008 12:47 PM  |  City

Power cut and slumping manufacturing sector has plunged the city's economy into negative growth during the first quarter of this year, says an agency.

The Jakarta Statistic Agency recorded that the city posted a total of Rp 155.1 trillion (US$16.6 billion), or 0.18 percent lower than the last quarter of 2007.

The manufacturing sector decreased by 3.4 percent to Rp 14.02 trillion, while the electricity, gas and cleanwater sector fell 0.56 percent to Rp 564.73 billion.

Agency head Djamal said the efficiency program of power provider PT PLN that came in a series of blackouts reduced its production to the city.

"The (manufacturing) companies also usually deal with a small of projects in the beginning of a year. The economy will pick up in the next quarters," Djamal said.

He added it was possible that the economic growth continued slumping with the central government's plan to raise the fuel price.

However, compared to the same quarter last year, Djamal said that the economic growth was still experiencing a 6.3 percent increase. He said that the highest growth was achieved by transportation and communication sector, which rose to 14.95 percent, followed by construction sector at 7.47 percent.

The city's employment rate is also still surviving with an increase of 0.48 percent from February last year, resulting of 4.56 million people in the work force.

"The number of unemployed people in February 2008 dropped by 38,000, from the 542,000 last year to 504,000 this year," said Djamal.

He explained that the increase in the work force was dominated by women, with 379,000 women entering the work force, while men were recorded at only 133,000.

He added that the level of open unemployment in February 2008 reached 11.06 percent, dropped by 2.21 percent from the 13.27 percent recorded last year.

"As a result, the number of unemployed women has been significantly decreasing from 14.08 percent last year to 10.56 percent this year. While unemployed men were also decreasing from 12.82 percent to 11.38 percent," he said.

According to him, between February 2007 and February 2008, the highest sector absorbing work forces was the tertiary sector, which employed around 367,000, followed by the secondary 142,000 and the primary 2,000.

"In February, Jakarta's formal sectors were able to absorb around 70 percent of work forces, while the informal around 30 percent," he said.

Last year, the city's economy grew by 6.4 percent to Rp 332.7 trillion, mostly triggered by vigorous growth at trade, hotel and restaurant sector, the transportation and telecommunications sector and the finance, rent and services sector.

Djamal said the telecommunications industry had become the fastest growing sub-sector, contributing more than half of the total output of Rp 30.5 trillion posted by the transportation and telecommunications sector last year.

"An increase in the number of people who own cellular phones has been the main contributor to growth in the telecommunications sub-sector," he said.

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