The Jakarta Post
The government has set a higher GDP growth target for 2020 than 2019 after taking into account the higher aggregate demand outlook for consumer spending, exports and investment.
Finance Minister Sri Mulyani Indrawati said in Bogor, West Java, on Tuesday that the government had set a higher economic growth target for 2020 than the target of 5.3 percent in 2019, while inflation was expected to hover between 2 and 4 percent – lower than 2019’s expectation of between 3.5 and 4.5 percent.
“We predict the economy will grow between 5.3 and 5.6 percent [in 2020], President [Joko ‘Jokowi’ Widodo] hopes that we can achieve 5.6 percent,” said Sri Mulyani after a plenary cabinet meeting on the indicative budget ceiling for the 2020 state budget at Bogor Palace.
She added that growth would be boosted by increased consumer spending, investments and exports in 2020.
Consumer spending is targeted to grow by 5.2 percent next year, higher than the 5.1 percent target in 2019, while investment growth is expected to reach 7.5 percent, which is also higher than the 7 percent target set this year. Meanwhile, export growth is projected to maintain its momentum and reach 7 percent next year, while the interest rate for the government’s three-month treasury bills (SPN) is predicted to be between 5 and 5.3 percent.
Sri Mulyani said the government had yet to decide on the rupiah exchange rate assumption against the US dollar for next year’s budget in light of the dynamic factors that determined the rupiah’s value. The Indonesian Crude Price (ICP), meanwhile, has been assumed to sit between US$60 and $70 per barrel next year, slightly lower than the $70 per barrel assumption in the 2019 state budget.
She said further details would become available when the government delivered its macroeconomic projection and draft fiscal policy (KEM-PPKF) to the House of Representatives (DPR) later this month, with the government’s final proposal expected to be delivered by Jokowi at the annual financial note address to the House in August. (bbn)