Kedutaan Besar Republik Indonesia
Embassy of the Republic of Indonesia
Ambassade de la RÉpublique d'Indonésie

Economic growth could be higher than expected: Darmin

Jakarta (ANTARA News) – Coordinating Minister for Economy Darmin Nasution said the countrys economic growth could be higher than the target of 5.1 percent if implementation is consistent in a number of programs.

“5.1 percent tends to be the baseline. We want higher than that at 5.2 percent-5.4 percent,” Darmin said at a discussion on “Prospects of Indonesian Economy” 2017 here on Monday.

He said consistency is needed in the development of infrastructure and implementation of economic policy packages and reform in fiscal policy.

“We have to acknowledge our growth engines have not run in full gear, but we have launched deregulation to boost investment and improve fiscal system through tax reform,” he said.

He said the government sought to strengthen the domestic economy as the global economy is not expected to fully recover yet in 2017 as a result of political uncertainties in the United States, Europe and China.

“We do this opening fiscal room for infrastructure and education and health to prevent us from being dragged into the global economic slowdown,”he said.

Economist from Samuel Asset Management Lana Soelistianingsih said Indonesian economy in 2017 could grow as projected by 5 percent – 5.2 percent driven by household consumption and stronger exports.

Lana, however, warned of a number of challenges in 2017 such as inflationary risk that could weaken the peoples purchasing power and potential shortfall in tax revenue although there should be no budget cut in the middle of the year.

Other challenges are competition in drawing capital with the United States although there is still high global liquidity, and tendency to protectionism in trade despite expected price hike for global commodity.

“We should focus more on domestic sector despite uncertainties. In mid term, demographic bonus could be an attraction as it has effect on the consumption sector,” she said.(*)