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Jakarta Post

Government spending fails to jack up growth as tax revenue slows

  • Marchio Irfan Gorbiano

    The Jakarta Post

PREMIUM
Jakarta   /   Thu, November 7, 2019   /  03:23 pm
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A building of the Directorate General of Taxation in Jakarta(kontan.co.id/File)

Government spending has failed to jack up Indonesia’s economic growth in the third quarter as it struggles with a tight budget due to low tax revenue amid a slowdown in the industrial and mining sectors. Public spending, which accounted for around 8 percent of gross domestic product (GDP), only grew 0.98 percent in the third quarter of this year, Statistics Indonesia (BPS) data show. The figure is a far cry from 6.96 percent growth recorded over the same period last year. Government spending is seen to have a big impact on the economy as it will spill over to other GDP components, such as investment and household spending. Indonesia’s economy only expanded by 5.02 percent year-on-year (yoy) in the third quarter, slowing further from the two-year low of 5.05 percent yoy recorded in the previous three-month period. Household spending stagnated while investment growth p...