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ndonesia is on track to achieve its economic target as the expected increase in the government'€™s spending for infrastructure development would be able to revive the country'€™s economy in the second half of the year, a local economic think tank said.

Center of Reform on Economics (CORE) estimates that the increase in the government'€™s spending would be able to accelerate the growth to 5.2 percent this year.

'€œ5.2 percent is moderate. It could be higher. We still have the chance to push the economy in the second semester,'€ CORE executive director Hendri Saparini said during an economic review event on Tuesday.

The government maintains its GDP growth target of 5.7 percent despite the cut in the country'€™s GDP growth projections by the International Monetary Fund (IMF) and the World Bank (WB).

IMF and the WB lowered their estimates on Indonesia'€™s GDP growth recently to 4.7 percent from 5.2 percent previously. Indonesia'€™s economy grew by 4.7 percent in the first quarter of this year, its lowest level since 2009 amid the country'€™s weak exports and domestic consumption, as well as the government'€™s lower than expected spending. Bank Indonesia has also lowered its GDP growth target to 5.1 percent.

Most financial analysts expect that the increase in government spending in the second quarter will help revive the economy but it would be unable to accelerate the full year growth pace to above 5 percent.

Hendri Saparini of CORE said she was quite optimistic that the full year growth would reach 5 percent if the government was able to quicken the budget disbursement for infrastructure projects. '€œIt would highly depend on the government'€™s spending, because we don'€™t expect exports to get better this year. The government'€™s spending will become the stimulus for the economy,'€ she said.

In the first half of the year, overall exports declined 11.86 percent to US$72.89 billion, posing grave challenges for the government to reach its 28 percent export growth target.

Sluggish government spending, which accounted for around one-tenth of the country'€™s GDP was often attributed as the cause of the economic slowdown.

Up until May 31, the government has only spent 30.5 percent of the earmarked Rp 1.9 quadrillion ($141.53 billion) classified as government spending, according to Finance Ministry data.

'€œThe government needs to work extra hard to have the right people in charge and to have a good plan to monitor the targets. Because it always happens like this every year,'€ the research director of CORE, Mohammad Faisal, said.

Some of the ministries saw sluggish budget realization achievements due to changes in their nomenclature, as their organizational structure saw significant alterations after the new government took office.

Many infrastructure projects have been delayed due to a long process of getting approvals for the budget disbursement.

Many officials chose not to make initiatives to quicken the process to avoid legal problems such as being implicated in corruption.

'€œWe are in the process of forming a team to evaluate the pace of the spending. They won'€™t only monitor, they will also look for a solution, Finance Ministry'€™s head of macro economy division of Fiscal Policy Office (BKF) Lucky Alfirman said. Hendri also warned the government to manage the investment flowing to the country. Realized investment from local and foreign investors rose by 16.6 percent to Rp 259.7 trillion yoy in the first six months this year amid no sign of imminent recovery in the global economy. '€œThese drivers of growth, if managed successfully, would drive the economic growth past the moderate point of 5.2 percent,'€ Hendri said. (fsu)