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Forcing 8% growth could lead to reckless fiscal management: CSIS
Given a recent decline in Indonesia’s economic growth and unfavorable global circumstances, pushing gross domestic product (GDP) growth toward the targeted 8 percent rate could lead to imprudent fiscal spending, a think tank has warned.
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President Prabowo Subianto (right) and Microsoft cofounder and philanthropist Bill Gates (center) inspect the lunch menu at an elementary school in East Jakarta on May 7, 2025. (BPMI/Setpres)
G
iven a recent decline in Indonesia’s economic growth and unfavorable global circumstances, a Jakarta-based think tank has warned against pushing gross domestic product (GDP) growth toward the targeted 8 percent rate.
Forcing the lofty target would lead to imprudent fiscal spending by prompting the government to focus use of the state’s financial resources on unproven programs, according to the Centre for Strategic and International Studies (CSIS).
Statistics Indonesia (BPS) announced on Monday that Indonesia’s economic growth from January through March was at 4.87 percent year-on-year, not far off the 4.7 percent full-year projection made by the International Monetary Fund (IMF).
CSIS researcher Riandy Laksono said in a press briefing on Wednesday that, amid global uncertainties, attaining 5 percent GDP growth this year “can be said to be impossible”, making the 8 percent growth envisioned by President Prabowo Subianto not just out of the question, but precarious.
Riandy explained that if the 8 percent figure were “just an aspiration”, that would be “fine”, but not as a concrete target incorporated into the five-year National Medium-Term Development Plan (RPJMN), which forms the basis for the government’s annual working plans (RKP).
“[The government] has to pursue unrealistic targets to reach 8 percent. So, 8 percent is not only an aspiration but has become a government work plan. This needs to be re-evaluated. It ultimately has made fiscal management reckless, because everything is concentrated on programs that can [achieve] such growth breakthroughs,” said Riandy.
Read also: GDP growth drops below 5% in Prabowo’s first quarter
