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Govt urged to boost consumer spending to reach 5.3% growth
Customers shop at an IKEA store in Alam Sutera, Tangerang, Banten, on Sept
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Customers shop at an IKEA store in Alam Sutera, Tangerang, Banten, on Sept. 20. (JP/Ricky Yudhistira) (JP/Ricky Yudhistira)
Customers shop at an IKEA store in Alam Sutera, Tangerang, Banten, on Sept. 20. (JP/Ricky Yudhistira)
The government should immediately implement certain economic measures, such as lowering fuel prices, appealing to the central bank to decrease interest rates and maintaining existing electricity tariffs, to increase people's purchasing power to help reach the 5.3 percent growth targeted in 2016 state budget, an expert has said.
'Domestic consumption should be restored to boost the confidence of consumers and business players,' Firmanzah, an economics professor at Paramadina University, told thejakartapost.com during a discussion in Jakarta on Wednesday.
According to Firmanzah, if Bank Indonesia (BI) would not lower interest rates to less than 7.5 percent due to the risk of capital outflow, the government should at least lower fuel prices ' as world's oil price had dropped below the nation's standard ' and maintain electricity tariffs in order to to increase economic growth in 2016.
He added that the government should favor consumers and local business players in maintaining their consumption in the upcoming seventh economic package.
'The seventh economic package is more concerned with demand-side policies, particularly with the lower PPh [income tax] Article 21 that favors Indonesian workers,' said Firmanzah, adding that he agreed with the government's policies in this instance.
The government is preparing the seventh economic package as part of efforts to boost the economy focusing on three sectors: logistics, village-related policies and tax incentives for labor-intensive industries. (dan)
