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Finance minister pessimistic over 5.2% growth target for 2016
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Finance Minister Sri Mulyani Indrawati (left) shakes hands with outgoing finance minister Bambang P. Brodjonegoro during their handover ceremony in Jakarta on July 27. (Antara Foto/M Agung Rajasa)
F
inance Minister Sri Mulyani Indrawati has expressed her pessimism over the 2016 economic growth target of 5.2 percent in light of current economic conditions.
In a meeting with the House of Representatives' Budgetary Commission (Banggar) at the House complex on Tuesday, Sri Mulyani said Indonesia must work extra hard to achieve 5.3 percent growth in the second half of 2016, following the 5.04 percent growth in the first half of the year.
The acceleration of government spending is expected to jack up the economy in the second semester. However, the Finance Ministry must delay and cut the state budget to offset the state revenue shortfall.
"This may create a contraction of economic growth and I admit the outlook of 5.2 percent growth is quite hard [to achieve], because with such an assumption our economy must grow 5.3 percent in the second half of 2016," Sri Mulyani explained.
Amid the dilemma, she continued, the government was committed to boosting the growth by maintaining investment and consumption. "Consumption will rise if the inflation rate remains low and investment will soar if confidence over our economic activities is well-maintained," she added.
As for next year, the government has maintained its economic growth outlook at 5.3 percent. Sri Mulyani believes consumption and investment will be major driving forces of economic growth in 2017, thus more economic policy packages will be prepared to improve the investment and business climates. (ags)
