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Jakarta Post

Faster government spending needed to cushion Trump effect

  • Anton Hermansyah
    Anton Hermansyah

    The Jakarta Post

Jakarta   /   Thu, December 15, 2016   /  02:56 pm
Faster government spending needed to cushion Trump effect National Development Planning Agency chief Bambang Brodjonegoro (second left) is part of a panel at a round table discussion on the 2016 Economic Outlook in Jakarta on August 9. (thejakartapost.com/Ayomi Amindoni)

The government should speed up the disbursement of state spending next year to help the country ease the impacts of global economic uncertainties and meet its growth target, an official has suggested.

National Development Planning Agency (Bappenas) chief Bambang Brodjonegoro said the global economy would remain volatile until the United States president-elect Donald Trump officially launched his economic program next year.

Until then, global investors prefer to wait and see.

"Then our [economic growth] engine during the first quarter next year will only come from domestic consumption and government spending," the former finance minister said on Thursday in a public forum.

Under such circumstances, Bambang predicted that the growth of the Indonesian economy would be stagnant should the government see the usual pattern in state spending, in which state budget absorption only quickens in the second quarter.

"Based on our calculations, a slow and uneven government spending would cut Indonesia’s 2017 economic growth by 20 to 30 basis points from the 5.1-5.3 percent baseline," he said.

President-elect Trump, who endorsed a trade protectionist stance during his campaigns, is scheduled to be sworn in on Jan. 20. (hwa)

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