Indonesia's gross domestic product fell 12.23 per cent in the first half of 1998 compared with the same period last year, marking what one World Bank official called the most dramatic economic collapse anywhere in 50 years. The Central Bureau of Statistics forecast a GDP decline of 13.06 per cent for the full year, the first fall since 1963, and took note of a sharp acceleration in the economy's slide in the second quarter, blamed in part on rioting in May that forced former President Suharto to resign.

`We were looking for precedents and we could not find any, at least not in the recent economic history of the post-Second World War," said Mr Jean-Michel Severino, the World Bank vice-president for east Asia and the Pacific.

The closest examples were some former Soviet republics but their economies deteriorated steadily for several years. The gloomy economic news came as Indonesia's new president, Mr B.J. Habibie, called on the country's largely Moslem population to fast two days a week to save on rice consumption. In spite of a bad harvest, the World Bank and other institutions say there is enough rice but distribution has deteriorated. With nearly half of Indonesia's 200 million people living below the line, many people may not be able to afford basic food. Output in the automotive and electronics sectors recorded the most dramatic fall in the first six months, down 55 per cent year-on-year. Construction fell 36.8 per cent over the same period.

Only plantations, fisheries and forestry rose as export revenues were boosted in rupiah terms by the currency's fall from Rp2,400 per dollar to Rp14,700 now.

The statistics bureau suggested the economy was bottoming out but economists and bankers remained pessimistic. One western banker said many Indonesian companies enjoyed a short window of opportunity on exports in the first half, as their imported stock of raw materials and spare parts were bought at high rupiah exchange rates while they exported at low rates.