Increase in APBN's Performance to Increase Growth

By : Herry Barus And Aldo Bella Putra | Saturday, September 09 2017 - 17:00 IWST

Menko Darmin Nasution (Setkab)
Menko Darmin Nasution (Setkab)

INDUSTRY.co.id - Jakarta - Coordinating Minister for the Economy Darmin Nasution requested an increase in government spending performance in the state budget to boost economic growth by 5.2 percent by the end of the year.

"What should be somewhat encouraged is from the state budget," said Darmin in Jakarta, Friday (08/09/2018)

Darmin said the growth in government consumption supported by the improved realization of this spending could support investment and export performance, which in the first half of 2017 contributed substantially to economic growth.

In addition, he expects investment growth or gross fixed capital formation that is more optimal in the second half of 2017, or better than the achievement of the first half of 2017.

"So if you want 5.2 percent growth, investment growth as long as the first semester is good," said Darmin.

Previously, the Central Bureau of Statistics (BPS) recorded economic growth in the first half of 2011 of 5.01 percent supported by improved investment and export performance.

However, in Q2 / 2017, government consumption contracted and grew 1.93 percent negatively due to lower realization of personnel expenditure and goods expenditure over the same period of 2016.

Positive note is the realization of social assistance expenditure for social protection and poverty alleviation which increased by 18.61 percent in this period.

On a separate occasion, Finance Minister Sri Mulyani Indrawati as reported by Antara, projected economic growth in 2017 amounted to 5.17 percent or slightly below the assumption in the APBNP set 5.2 percent.

She said the projection could be realized with an investment performance record, which in the first half of 2017 only grew 5.1 percent, grew by 5.4 percent in the second half of 2017.

However, efforts to improve the performance of these investments could face obstacles in the form of banking credit growth that is still experiencing sluggishness until mid-2017.

"The growth of bank credit still needs to be careful because banks consolidate a lot to the credit performance that is experiencing pressure due to declining commodity prices," said Sri Mulyani in a working meeting with Commission XI DPR.

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