Finance Ministry projects growth to reach 5 percent this year

14 , 2016 | Source: Antara News

The Finance Ministry has predicted that Indonesias economic growth will stay at 5.0 percent this year due to several factors including spending cut.

"One of the triggering factors is government consumption which falls to 3 percent due to spending cut," the head of the ministrys fiscal policy board Suahasil Nazara said at a working meeting with the House of Representatives Budget Committee at the Parliament Building here on Tuesday.

The other factor is investment which has not grown as expected due to low domestic demand, he said.

He further said the export and import sector still recorded negative growth . Meanwhile, the countrys imports which exceeded its exports have caused the balance of payment to record a deficit.

The 5.0 percent growth rate will be derived from the first-semester growth of 5.04 percent and the projected second-semester growth of 5.0-5.1 percent, he said.

But he believed the economic growth will stay above 5.0 percent for all of this year although it will not reach 5.1 percent . "It can be 5.05; 5.06 (percent, meaning that if it stays at above 5.0 percent it will not be more than 5.1 percent," he said.

The growth forecast of 5.0 percent for 2016 is lower than the target of 5.2 percent set in the revised 2016 state budget. (*)

 

The Indonesian government plans to issue savings sukuk (Islamic bonds), series ST007, to expand the base of retail investors in the domestic financial market and finance green projects in the state budget (APBN).
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