Economic Overview

The service sector dominates the local economy, contributing approximately 35% to the regional Gross Domestic Product ( GDP ). This include tourism, education , hotel and catering facilities. Agriculture accounts for a further 20% of GDP, and transport and communication services around 11% altough there has been a slight shift towards the secondary and tertiary sectors in recent years, the manufacturing industry still ranks at third, with 15% of the regional DDP. The contructions industry and the financing and property sector each account for 10%. Total GDP in 1998 ( at current prices ) was US$ 2.7 billion.

Yogyakarta is well known asa a center of traditional Javanese handicraft and leather producs , mostly produced by small enterprises at village level throughout the region. The emergence of modern tourism and education services center of national importance. With its highly skilled workforce and pool of university graduates, Yogya is now focusing on the light industry, software, telecomunications, medical and other high-tech sectors.

Yogya's regional economicdevelopment in the 1990s ( until the nationwide economic and political crisisof 1996-98 ) was an above average 7%. the most impressive growth figures were found in the utilitie, manufacturing , finance , and real estate , hotel , catering and service sectors. The building of educational instutions and hotels , finaced by private investors or goverment authorities, led to the growth of the construction industry during this period.

The effects of the severe political and economic crisis are still being felt in the province, which has had to endure two years of negative economic growth rates and a dearth of domestic and foreign investement, there also been a significant drop in tourist numbers, due in large part to negative international media publicity resulting from ethnic clashes occurring in the more remote parts of the archipelago.

Present predictions for economic recovery are more optimistic, with the Bank of Indonesia aiming for a 5-7% growth rate for the country as whole in 2000/2001, and an inflation rate of less than 10%.