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Indonesia Sets Moderate Growth Goals

Indonesia Sets Moderate Growth GoalsIndonesia Sets Moderate Growth Goals

Amid rising external pressures, Indonesia’s economy is expected to expand by 5.3% next year on the back of stronger domestic consumption, investment and export, President Joko Widodo told Parliament on Thursday.

The growth will be oriented towards equality by accelerating development in eastern Indonesia, border areas and less-developed regions, strengthening economy in villages and intensifying efforts to address poverty, he said in his remarks to endorse the proposed 2019 state budget, Antara reported.

To support the growth target, the government has earmarked 2.44 quadrillion rupiah ($229.53 billion) for the state budget next year, up 10% from the figure estimated for this year.

“The quality of the state spending will be improved and focused on stimulating the economy and creating people’s prosperity in a just and equal manner,” Joko said.

The administration will also keep inflation between 2.5 and 4.5%, enabling the population to meet its basic needs, especially by ensuring affordable food prices, he added.

In addition, it expects to maintain people’s purchasing power through various social security programs, especially for the poor and low-income population.

South-east Asia’s top economy expanded by 5.07% last year and the government anticipates that it grew by only 5.18% this year, down from the 5.4% outlined earlier.

Weak household consumption and the global commodity slump has put a brake on Joko’s ambition of achieving 7% economic growth—a figure set when he came into office in late 2014. In his first year of tenure, the emerging economy expanded by merely 4.8%, its slowest pace in six years.

But, growth picked up pace to a five-year high of 5.27% in the second quarter of this year, bringing the overall growth in the first half of this year to 5.17%. Inflation, a key macroeconomic indicator, bodes well with the central bank’s target range of between 2.5% and 4.5%.

Joko, who is seeking re-election in next year’s presidential polls, also claimed some achievements that have been triggered by a robust economic growth at around 5% during his nearly four-year tenure.

They include the fall of the poverty rate in the world’s fourth-most populous nation of more than 260 million people to a historic low of 9.82% in March, covering 25.95 million of its population. Furthermore, the Gini coefficient, which measures inequality, slid to 0.389 in March, the lowest in six years.

 

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