Minister of Finance: Indonesia Must Keep Economy Momentum

INDUSTRY.co.id - Jakarta - Finance Minister Sri Mulyani Indrawati confirmed that Indonesia will continue to maintain the momentum of economic growth that has been established by maintaining the stability of the performance of the state budget.

"Indonesia has a desire to maintain the momentum of the economy and stability of the state budget, so we are looking for a 'balance' point," said Sri Mulyani in response to the latest IMF assessment results on Indonesia's economy in Jakarta, Wednesday (7/2/2018).

Sri Mulyani said that one of the efforts to maintain the stability of the State Budget performance is to maintain the budget deficit in a controlled level and within the permitted limits of the Act, which is three percent to GDP.

"We are with a lower deficit, especially to make the 'primary balance' smaller, to create a 'fiscal buffer', because the economy is not always 'easy'," she said.

According to her, the consolidation of the state budget to keep the budget deficit under control can become a cushion when an economic outbreak comes from outside.

"In a good situation, we make the state budget more 'consolidate', so that when there is 'shock' from outside we still have 'space' for intervention," said the former Managing Director of this World Bank.

Previously, the International Monetary Fund published the results of the assessment contained in the IV Consultation Report for Indonesia 2017 and has been discussed at the Executive Board meeting of the IMF at Washington D.C.

In the assessment of the IMF, Indonesia is currently well positioned to overcome various socio-economic challenges, supported by improved performance in both investment and export sectors, which grew positively throughout 2017.

The Executive Director of the meeting welcomed the focus of the government's short-term policy mix aimed at supporting economic growth while maintaining well-maintained stability.

To that end, the Executive Director noted that the adjustment of fiscal policy in 2018 should be gradual to support the growth performance as well as to build fiscal buffers.

In addition, the Executive Director, as quoted by Antara, sees the current monetary policy as sufficient to maintain price stability and support economic growth and recommends a further increase in policy transmission.

Although Indonesia's current economic performance is in good health, as seen from stable economic growth, moderate inflation and a reasonable current account deficit, there is still a risk from unstable capital flows.

Overall, the Executive Director stressed the importance of achieving higher potential growth to help create jobs for the young workforce.

Priorities should also be given to fiscal structural reform packages that can strengthen themselves and mobilize revenues to finance development and support structural reforms in the product, labor and financial markets.