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Stimulus alone cannot prop up economic growth, Sri Mulyani says
Finance Minister Sri Mulyani Indrawati has said that fiscal and monetary stimulus alone cannot boost Indonesian economic growth and instead should implement more structural reforms.
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Wearing a white shirt, Finance Minister Sri Mulyani Indrawati waits for her car on July 8, 2024, at the House of Representatives complex in Jakarta. (TJP/Deni Ghifari)
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inance Minister Sri Mulyani Indrawati has said that fiscal and monetary stimulus alone cannot boost Indonesian economic growth and argued that the country needs more to progress beyond the current pace of gross domestic product (GDP) expansion.
The minister said the country needs structural reforms to improve its competitiveness and productivity if it wants to achieve economic growth above 5 percent, which has been the country’s pace annually over the past ten years.
“If we want to achieve [GDP growth of] above 5 percent, then the [right] instrument is not stimulus, fiscal or monetary, it’s through structural policies and productivity,” Sri Mulyani said in a meeting with the House of Representatives on Wednesday, as cited by Bisnis.
Sri Mulyani went on to say that currently the government has rolled out fiscal policies to maintain household consumption and investment, which contribute over 80 percent to the GDP.
Other spending also put focus on improving the quality of human capital through the free nutritious meals program as well as expenditures on education, health and social safety nets.
Incumbent President Joko “Jokowi” Widodo has stressed infrastructure development to boost the country’s competitiveness, including to prop up investment and exports.
“From the export side, apart from competitiveness, we also position Indonesia in the global value chain through downstream policies,” Sri Mulyani said.
