The Jakarta Post
Finance Minister Sri Mulyani Indrawati is expecting that household spending, the primary driver of gross domestic product (GDP) growth in Indonesia, will expand by around 5 percent in the first quarter of this year.
Sri Mulyani said the high disbursement of the social assistance program by the government would hopefully boost it.
“From the government side, many of the social assistance programs have been disbursed in the first quarter,” she added in Jakarta on Wednesday. “We hope that in the first quarter [of 2019] government expenditure would be quite high, boosted by spending on social assistance programs.”
She said one of the factors that contributed to increased social assistance spending this year was the increase in the nominal amount of cash transfers disbursed to poor people under the Family Hope Program (PKH).
The government has allocated Rp 34.4 trillion (US$2.44 billion) for the PKH program for 10 million families this year, an increase from Rp 19.3 trillion that was allocated last year.
As of March, social assistance spending had grown 106.62 percent compared to the same period last year to Rp 36.97 trillion, according to Finance Ministry data. The figure represented 38.09 percent out of Rp 224.41 trillion allocated for social assistance programs this year.
Sri Mulyani said relatively low inflation and high consumer confidence were also factors that could boost household spending in the first quarter this year.
Last year, household spending, which accounted for more than half of the GDP, expanded by 5.08 percent, Statistics Indonesia (BPS) data revealed, which contributed to 5.17 percent in GDP expansion. (bbn)