Reviewing the 2017 Economic Growth Target

Monday, 22 May 2017 , 15:00:00 WIB - Economy

House of Representatives Chairman, Setya Novanto (left), accompanied by vice chairmen Taufik Kurniawan (second left) and Agus Hermanto (right), is seen receiving a report on the macroeconomic condition from Minister of Finance Sri Mulyani (second right) in a plenary meeting, Jakarta, Friday (19/5). (ANTARA)

JAKARTA, GRES.NEWS – Minister of Finance Sri Mulyani has set Indonesia’s economic growth target in the Draft State Budget (RAPBN) at 5.4-6.1 percent.

House of Representatives Commission XI member Heri Gunawan criticizes the maximum of 6.1 percent, saying that it is too ambitious. He says the government is still too focused on economic growth rather than economic equality.

"For the people, the most important thing is not how high the economic growth can reach. It is about whether the growth can free them from unemployment, poverty and [economic] disparity. The economic growths must be high-quality," Heri said, in a press release, Friday (19/5).

The 6.1 percent target, according to him, raises questions as the government often set high economic growth targets, but would eventually miss the by far. In 2015, for example, the government targeted above 5 percent, but the figure that materialized was 4.7 percent.

"In 2016, the economy only grew 5 percent and, in 2017, the figure is expected to reach 5.3 percent. Unfortunately, the growths have not been contributing significantly to the nation’s problem of growing unemployment and poverty, and the still wide economic disparity," he said.

Heri says, the central government must improve the economy of regions. Coordination between the central government and regional governments must be developed well. Many regions are still issiung policies that ‘neutrialize’ the central government’s policies. Issues surrounding infrastructure connectivity and logistics cost must also be the central government’s focus.

"A high-quality economic growth must be supported by credible State Budget. Avoid the growths being supported by debts. Remember, we have not freed ourselves from the fiscal deficit that is increasingly higher by day," he said.

House of Representatives Vice Chairman, Taufik Kurniawan, is in disagreement with Heri. He says the economic growth target is moderate.

"The government said Indonesia is under global economic uncertainty. Therefore, we must understand their decision. This is not just about the political situation in the domestic market. It is also about the global economy, such as in the US, China, South Korea and North Korea, and the central issue in Europe. All this is about waiting and seeing, concerning bank’s transparency, information technology advancements and the progresses to reach a new balance," Taufik said.

He added, Indonesia’s political situation is also greatly affecting the economy. The cultural transformation going on in the country, he says, must not disrupt the nation’s political and economic performances. The intolerance actions are dangerous and will pressure the economy.

ECONOMY IS IMPROVING – Meanwhile, Sri Mulyani explained that the high economic growth target aims at improving economic equality. "The main challenge is to curb poverty hitting 27 million Indonesians. With sufficient, social, economic and human resources, Indonesia has the opportunity to become and advanced, just and prosperous nation. Indonesia has a large population, a growing middle-income class and a political system that is democratic," she said.

Meanwhile, Bank Indonesia said the country’s is improving, pointing to the fact that the national economic growth reached 5.01 percent in the first quarter of 2017, and export and import value improved.

Bank Indonesia Deputy Governor Mirza Adityaswara said the national economic growth is projected to grow 5-5.4 percent this year. "Based on the recurring pattern, the worth would improve in the second quarters. This is evident from the growing investment and capital inflow, and the export and import sector is contributing more to the gross domestic product (GDP)," Mirza said, Friday (19/5).

The national economic growth in the first quarter of 2017 that grew 5.01 percent was supported by the regions of Java, which posted 5.66 percent and Kalimantan, 4.92 percent.

The central bank predicts inflation in May 2017 will reach 0.27 percent, which would be in line with its target. The variables that must be watched are the prices of poultry, chicken eggs and electricity tariffs, which has just been raised.

Shallots and red chilies will contribute to deflation. In April, 2017, according to the Central Statistics Agency (BPS), inflation came to 0.09 percent. (dtc)