16. Outline of Economic Program for Indonesia (As of May 19, 1998)

16. Outline of EconomicProgram for Indonesia (As of May 19, 1998)

I. Outline of IMF Arrangement

Stand-By Arrangement

Scale: 7.3 billion SDR

(Approx. $10.0 billion, equivalentto 490% of quota)

Period: Three years, beginning inNovember 1997

Disbursements:

II. Macroeconomic Indicators

	1997 (Goals)	1998 (Goals, Initial)	1998 (Goals, As of January)	1998 (Goals, Current)
Real GDP growth (%)	5.0	3.0	-------------->	-4.0
CPI Inflation (%)	10.0	9.0	---> 20.0 --->	45.0
Fiscal balance (% of GDP)	0.8	1.0	---> -1.0 --->	Approximately -3.0
External current account balance (% of GDP)	-1.0	-2.2	--> Surplus -->	3.0

III. Principal Points ofMost Recent Program (Announced on April 10, 1998)

Because of the decline in economic activity and the need forsubsidies on basic necessities, larger fiscal deficits will beallowed.
Strong monetary policies will be implemented to stabilizethe exchange rate.
To accelerate the bank restructuring (strengthening the BankRestructuring Agency, etc.)
To modify or strengthen the implementation of structural reformmeasures.
(Example) Subsidies on essentialfood items will be maintained, but fairer competitive conditionswill be ensured by providing subsidies to private sector participantsin addition to BULOG (Food Management Agency).
To resolve the corporate debt problem, the creation of a frameworkfor foreign creditors will be promoted.
The social safety net will be strengthened (including assistanceto small and medium-sized enterprises).

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