Indonesia Aims for 5.6 Percent Economic Growth in 2018

• Apr 27, 2017

TEMPO.CO, Jakarta – Indonesia is aiming for 5.6 percent economic growth in 2018. The government will turn its focus to six sectors to achieve the target. “[There are] six sectors, namely processing industry, particularly non-oil and gas, agriculture, trade, information and communication, construction, and financial services,” the National Development Planning Minister Soemantri Brodjonegoro said yesterday.

Bambang said that three priority sectors will play a major role in a bid to boost growth and create employment opportunities. “[The three sectors are] processing industry, agriculture and tourism. Consumption and investment must continue to drive the economy,” he said.

The central and local governments will invest in select sectors. Bambang said that more attention will be given to projects that can drive up productivity and improve private sector activities, namely infrastructure, transportation and logistics.

The government will prioritize regions with an ability to leverage other regions, such as industrial areas, special economic zones (SEZ) and tourism areas. “However, a limited fiscal capacity means that the government cannot be solely relied upon to make investments,” Bambang said.

Therefore, Bambang said, the government is launching the non-state budget investment financing (PINA), in addition to a cooperation scheme between the government and state-owned enterprises. “It needs to be supported by everyone to accelerate infrastructure projects.”

The government will issue policies to boost the economy by scrapping barriers to private firm development in six major sectors, improving the investment climate in various regions, utilizing and distributing repatriated funds for investment, preserving people’s purchasing power and performing structural reforms.

Earlier, President Joko Widodo had said that Indonesia is facing a significant economic inequality. Therefore, the government will continue to tackle it through asset redistribution and partnership policies. “We want to push down the Gini ratio,” he said. Gini ratio is a measurement of inequality in wealth distribution. Indonesia’s Gini ratio in 2016 was 0.397.

According to Jokowi, Indonesia’s economic growth is better compared to other countries. Last year, the economy grew by 5.02 percent, the world’s third best achievement after India and China.

Source: https://en.tempo.co/read/news/2017/04/27/056869920/Indonesia-Aims-for-56-Percent-Economic-Growth-in-2018