TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Political stability will maintain Indonesia's economic growth momentum
Change Size
New team: President Joko “Jokowi” Widodo, accompanied by Vice President Jusuf Kalla, unveils his new aides following a Cabinet reshuffle at the State Palace in Jakarta on July 27. (Antara/Widodo S. Jusuf)
P
olitical stability and more private investment are among factors that can maintain the country’s momentum for future economic growth, an analyst has said.
Mandiri Sekuritas chief economist Leo Putra Rinaldy said the country had managed to maintain political stability following the Golkar Party's decision to support President Joko "Jokowi" Widodo’s administration in July.
"Economic and investment stability will be solid only if a country has political stability. Currently, 70 percent of our House of Representatives members support Jokowi. Before Golkar threw in its support, it was only 40 percent," he said, Friday.
Leo further explained the nation’s political condition was now more stable as seven parties were now supporting Jokowi’s administration.
He also said Sri Mulyani’s decision to conduct a second budget cut in August had created lower fiscal risks. The decision had not only led to lower inflation and a stable rupiah but also would serve as a strong platform for private investment to improve, he went on.
Mandiri Sekuritas has forecast the economy to grow by 5 percent this year, slightly better than the previous year, in which it only grew 4.8 percent. The country’s economy will continue to improve next year within the range of 5.1 to 5.2 percent, the securities company further says.
Leo said the rupiah’s exchange rate would also continue to strengthen to Rp 13,100 per US dollar this year, and around Rp 12,800 to 13,000 per dollar next year. "In my opinion, the rupiah has experienced the biggest jump compared to other currencies, reaching 6 percent," said the economist, who also applauded the successful efforts of the government and Bank Indonesia in managing inflation. (ebf)
