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Sri Mulyani sets sights on 6% GDP growth by 2023 through reform
The Finance Minister said structural reform, in part through the Jobs Creation Law, could accelerate Indonesia's economic growth to above 6 percent by 2023 without putting additional pressure on the state budget.
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Finance Minister Sri Mulyani Indrawati delivers her remarks after the signing of a memorandum of understanding (MoU) and a cooperation agreement for the Coordination of the Acceleration and Electronification of Regional Government Transactions at the Office of the Coordinating Ministry for Economic Affairs, Jakarta, Feb. 13, 2020. The agreement aims to increase accountability in the management of state finances and minimize the potential for financial leakage in local governments. (Antara/M Risyal Hidayat)
T
he Finance Ministry plans to boost Indonesia’s gross domestic product (GDP) growth to 6 percent by 2023 through mid-term structural reform starting with next year’s state budget.
Finance Minister Sri Mulyani Indrawati said on Thursday that the government would focus more spending next year on improving human capital, infrastructure and bureaucratic and regulatory reform, including by implementing the Jobs Creation Law.
The government issued the Jobs Creation Law last year and issued dozens of implementing regulations earlier this year in starting to operationalize the omnibus law and spur investment.
“This can support our economic growth to above 6 percent without putting pressure on the state budget, and it can even make our budget healthy again as the growth leads to a strengthened tax base,” the minister said in a virtual meeting.
The ministry’s reform plans were announced at a time when Indonesia’s economy is still recovering from its first recession in over two decades after its GDP shrank 2.07 percent last year, according to data from Statistics Indonesia (BPS).
Based on the growth target outlined in the 2020 state budget, the Finance Ministry estimates that Indonesia lost Rp 1.35 quadrillion (US$93.88 billion) in economic output last year due to the pandemic. The estimated loss accounted for 8.8 percent of last year’s GDP.
The government projects the national economy to grow between 4.5 percent and 5.3 percent this year. For next year, the growth target ranges from 5.4 percent and 6 percent, according to the National Development Planning Agency (Bappenas).
