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Jakarta Post

Govt, House agree on 2020 economic growth target of 5.3%

  • News Desk

    The Jakarta Post

Jakarta   /   Fri, August 30, 2019   /   01:21 pm
Govt, House agree on 2020 economic growth target of 5.3% Finance Minister Sri Mulyani Indrawati (center), accompanied by Deputy Finance Minister Mardiasmo (left), talks to a legislator after presenting fiscal policy principles as part of the 2020 state budget in Jakarta recently. (Antara/Puspa Perwitasari)

The House of Representatives has approved the government’s target of 5.3 percent economic growth for next year and this will be the foundation for other projections made under the draft 2020 state budget.

The target will be used as the baseline for next year’s state budget proposal, alongside other macroeconomic assumptions, which include a 3.1 percent inflation rate, Rp 13,900 to Rp 14,400 per US dollar exchange rate and 5.4 percent three-month treasury bill rate.

Although the government was optimistic about achieving the target, Finance Minister Sri Mulyani Indrawati said the growth would likely be hindered by the slow performance of exports amid the current global economic uncertainty, especially with the escalating trade tension between the United States and China, both of which are major export destinations for Indonesian products.

Minister Sri Mulyani said the government would boost exports by supporting export financing through the national interest account scheme and would seek new markets instead of depending on traditional markets like China or the US.

“Such a situation will create positive momentum for next year’s exports compared with this year,” she said at a hearing session with Commission XI, which oversees financial affairs, at the House on Thursday.

Meanwhile, Sri Mulyani forecast that consumer spending would also contribute to the growth, adding that the spending had remained stable at 5 percent for the last five years even though commodity prices had been volatile. She projected that the 5 percent growth rate for consumer spending would continue until the end of the year.

During the hearing attended by House members from nine out of 10 factions, the House also agreed upon the national development target, including a 4.8 to 5.1 percent unemployment rate, 8.5 to 9 percent poverty rate, 0.375 to 0.380 Gini ratio and a human development index of 72.51. (asp)