Indonesia: Govt Aiming for 6.3 Percent Investment Growth

• Aug 22, 2017

TEMPO.CO, Jakarta – Finance Ministry Sri Mulyani said that the government is aiming for 6.3 percent investment growth in a bid to achieve the economic growth target of 5.4 percent set in the draft 2018 state budget (RAPBN).

“We assume that bank loans will grow considerably. Having seen the realization up to mid-year, it must be stepped up,” Sri said in her office yesterday.

According to Sri, bank loan growth will be highly affected by the optimism of the business world. If businesses set high growth targets, they will apply for bank loans for working capital or investment. In addition, loan growth will also be shaped by bank capacity, particularly its balance sheet. Sri expects capital market investment to increase in order to help achieve investment growth target. “We expect companies to launch an initial public offering or rights issue,” she said.

Aside from investment, economic growth for next year will be boosted by an increase in household consumption set at 5.1 percent and government consumption which is expected to grow by 3.8 percent. “As for household consumption, we have to keep an eye on weaker purchasing power,” Sri said. Meanwhile, export is expected to grow by 5.1 percent and import to grow by 4.5 percent. Sri said that external factors affecting export are tensions in North Korea or the South China Sea. “They could disturb goods traffic,” she said.

Source: https://en.tempo.co/read/news/2017/08/22/056902007/Govt-Aiming-for-63-Percent-Investment-Growth