BUSINESS AND TRADE

From the second half to April 2006, the tight bias monetary policy pursued by Bank Indonesia succeeded in curbing rinsing expectations of inflation. The very high inflation in early 2006 gradually eased to 6.6 percent per year at the end of the year, below 8.0 percent target rage of Bank Indonesia.

The significant improvement in exports during 2006 strongly reinforced the balance of payments, which recorded a hefty surplus. The high balance of payment surplus in 2006 resulted mainly from the surplus in the current account. Non-oil and gas exports showed impressive growth on the strength of world demand and high international commodity prices.

At the same time, import growth decline due to lack of recovery in domestic demand. Nevertheless, there was a significant increase in capital goods imports, indicating a rise in potential for production. The substantial balance of payments enabled the government to move forward with early repayment of US$ 7.6 billion owed to the IMF. Even after the early repayment, international reserves at end of 2006 were still up from the previous years at US$ 42.4 billion.

The cautious easing the BI rate in May 2006 to 9.75 percent and in June 2007 to 8.5 percent have been welcomed by the business community and have been met with positive response from market actors. Reflecting this were rising share prices, with the stock index closing the year 2006 at 1,805 level, decline in long-term bond yield and renewed growth in consumer confidence. Despite this, the reductions in the BI rate have only seen limited transmission to lending rates. For this reason, such monetary relaxation measure is accompanied by changes in definitions and banking regulations pertaining to the Legal Lending Limit (LLL). Other steps have also been taken to reinforce the national payment system and thus assure its efficient, expeditious and reliable operation in support of economic activities.

Indonesian Economic Indicators

Currency	:	Rupiah
Fiscal Year	:	Calendar year
GDP	:	$ 302.996bn (2006)
GDP growth	:	5.5 % (2006)
GDP per capita	:	$ 1.377 (2006)
Main industries	:	petroleum and natural gas, textiles, apparel, footwear, mining, cement, chemical fertilizers, plywood, rubber , food products, and tourism.
Exports	:	$ 100.798bn (2006)
Export goods	:	oil and gas, plywood, textiles, rubber
Main export partner	:	Japan, United States, Singapore, South Korea and China
Imports	:	$ 61.065bn (2006)
Import goods	:	machinery and equipment, chemicals, fuels, food
Main import partner	:	Japan, Singapore, China, United States, Thailand, Australia, South Korea and Saudi Arabia.

There has been report of commercial fraudulence transactions through internet between Indonesia and South Africa.

For trade and commercial enquiries, please contact the Embassy of the Republic of Indonesia:

Economic Section
949 Schoeman Street, Arcadia
PO Box 13155 Hatfield 0028
Pretoria, South Africa

Mr. Berlian Helmy
Economic Section

Phone	:	+27 12 342 3350
Fax	:	+ 27 12 342 3369
Email	:	berlian.helmy@indonesia-pretoria.org.za
Website	:	www.indonesia-pretoria.org.za

Indonesian Trade Promotion Center
02/E1 2nd floor Village Walk Offices
Cnr. Maude Street & Rivonia Road
Sandton
PO Box 233
Private Bag X9916
Sandton 2146, South Africa

Mr. Wawan Sudarmawan
Head of Indonesian Trade Promotion Center

Phone	:	+ 27 11 884 6240
Fax	:	+ 27 11 884 6242
Email	:	wawan@itpcjhb.co.za, itpc@itpcjhb.co.za
Website	:	www.itpc.co.za