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World Bank projects higher growth for Indonesia, calls for better spending
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A worker carries a metal bar at the construction site of Regatta Apartments in North Jakarta on Sept. 1, 2016. According to World Bank, the 2017 state budget improved the country's quality of spending, including sustained higher allocations for infrastructure. (JP/Seto Wardhana.)
E
ffective spending along with reform in fiscal policy and the investment climate will help Indonesia grow its economy by 5.3 percent this year, according to a new World Bank report. The estimation is higher than the government's estimate of 5.1 percent.
In its January edition of Indonesia Economic Quarterly, World Bank stated that the 2017 state budget improved the country's quality of spending, including sustained higher allocations for infrastructure, health and social assistance, with better targeting for energy subsidies and social programs for the poor.
"It's very important for Indonesia to sustain this reform momentum so that the country can meet its development goals," said Rodrigo Chaves, the bank's country director for Indonesia, on Tuesday.
According to the report, improving the quality of public expenditure entails two actions with the first being reallocation toward priority sectors where public spending is low as additional spending can have the greatest impact on poverty and growth.
"These sectors include infrastructure, health and social assistance," the report said.
The second thing that the government should do is to maximize the effectiveness of spending in all sectors, particularly agriculture, education and social assistance, the bank wrote. (ags)
