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2016 state budget will be more realistic: Minister
âWe must be realisticâ: Finance Minister Bambang Brodjonegoro said on Tuesday that Indonesiaâs macro-economic and prosperity targets listed in the 2016 draft state budget need to be more realistic as negative impacts of global economic uncertainty will remain a factor
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âWe must be realisticâ: Finance Minister Bambang Brodjonegoro said on Tuesday that Indonesiaâs macro-economic and prosperity targets listed in the 2016 draft state budget need to be more realistic as negative impacts of global economic uncertainty will remain a factor. (Antara/Sigid Kurniawan) (Antara/Sigid Kurniawan)
'We must be realistic': Finance Minister Bambang Brodjonegoro said on Tuesday that Indonesia's macro-economic and prosperity targets listed in the 2016 draft state budget need to be more realistic as negative impacts of global economic uncertainty will remain a factor. (Antara/Sigid Kurniawan)
Finance Minister Bambang Brodjonegoro said on Tuesday that Indonesia's macro-economic and prosperity targets listed in the 2016 State Budget (APBN) should be more realistic as negative impacts from global economic uncertainties would continue to be a threat.
'We have to be very realistic and we should not set a too high target. Even if some things go better than expected, [realistic targets] would be an advantage for Indonesia,' he said as quoted by Antara.
The minister made the statement speaking to the House of Representatives budgetary body (Banggar) leaders in a meeting in Jakarta on Tuesday, during which he predicted that the impacts of current global economic worries would not fully fade before the end of 2016.
A number of House factions have said that Indonesia's economic growth target, which was set at 5.5 percent, is too optimistic. The 5.5 percent growth target is one of several macro-economic indicators President Joko 'Jokowi' Widodo conveyed in his delivery of the 2016 draft state budget bill (RAPBN) and state financial notes at the House on Aug. 14.
Some House factions are also of the opinion that a rupiah exchange rate assumption of Rp 13,400 per US dollar is also too ambitious, considering the heavy pressures on the rupiah, which have been triggered by capital flights and the potential for currency wars following currency devaluations in a number of countries.
Bambang said the macro assumptions and targets should be revised because the government did not adequately consider the dynamics of the global economy.
Until the first week of September, the minister said, several developed economies were still being very careful in responding to developments in the global economy.
Bambang further said that in a G-20 meeting in Ankara, Turkey, from Sept. 3 to 6, most G-20 member countries were certain that the global economy would not recover fully in 2015, and that they were even unsure whether it would recover in 2016.
Among aspects that Bambang believes crucial for examining the prospects of the 2016 global economy were the US Federal Reserve's (Fed) potential fund rate hike, the impact of China's yuan devaluation, economic growth recovery in Europe and Japan and commodity prices.
'For this year, everyone agrees that global economic growth will be lower than in 2014,' said Bambang. (ebf)
