Indonesia`s economy expected to perform better this year

04 January, 2016 | Source: Antara News

Jakarta (ANTARA News) - The Indonesian economy is expected to perform better this year than it did last year after the government issued a series of economic policy packages.

Since September last year, the government has issued at least seven economic policy packages aimed at strengthening the national economy amid a global economic slowdown.

By deregulating an assortment of economic policies, the government intends to attract more investment to support the economic growth by scrapping a number of rules seen as bottlenecks in the way of investment, offering a plenty of tax breaks, and cutting the red tape in the investment sector.

The deregulation of economic policies also simplifies issuance of permits in the forestry sector to allow more investment from miners, geothermal investors and forestry firms and offers incentives in the form of more attractive rates to exporters depositing their foreign exchange earnings in local banks.

In addition, the deregulation of economic policies also offers companies the issuance of a license within three-hours of application if they wish to operate in industrial parks with a total investment of more than Rp100 billion or employ a minimum of 1,000 workers.

Following deregulated economic policies, the minimum wages are now calculated by using each provinces inflation rate and economic growth, thereby enabling businesses to better estimate their labor costs which are part of production costs.

The series of economic policy packages are expected to attract more investment and create more jobs, which will eventually boost the peoples purchasing power and increase domestic consumption, one of the engines of the countrys economic growth.

Many parties including businesspeople and bankers believe the economic policy packages will begin showing results in 2016.

The World Bank has predicted that the Indonesian economy will expand by 5.3 percent this year, higher than the economic growth forecast of 4.7 percent for last year.

World Bank chief economist for Indonesia Ndiame Diop was quoted by as saying last year that the economic policy packages will begin to have a positive impact on the public this year.

He predicted that government spending will increase to 3.2 percent this year from last years forecast of 2.1 percent, while capital expenditures will go up to 5 percent this year from the 2015 projection of 3.7 percent.

Indonesias exports are expected to grow by 4.7 percent and imports to increase by 3.6 percent this year, along with the expected recovery of global trade.

The expected robust economy of China, one of Indonesias main trade partners, is predicted to boost demand for Indonesian commodities.

Meanwhile, the Association of Indonesian Businessmen (Apindo) has expressed optimism that the economic growth this year will be better than that of last year despite global economic pressure.



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