JAKARTA (TheInsiderStories) – The House of Representatives’ Commission-XI, which is in charge of state budget, has approved the macroeconomic assumptions in the 2019 state budget with economic growth being targeted at 5.3 percent and inflation at 3.5 percent.
During the hearing with the House’s state budget commission led by Commission-XI Chairman Melchias Markus Mekeng on Thursday, the House members and the government also agreed to peg the value of rupiah at Rp14,400 against the US dollar, and the rate of treasury bills at 5.3 percent.
The economic growth target of 5.3 percent in 2019 is lower than 5.4 percent target set in 2018, although the government has stated that the economic growth this year will likely reach only 5.2 percent.
Finance Minister Sri Mulyani Indrawati said during the hearing that the macroeconomic assumptions are realistic. “Despite of the downside risks of import policy, the target of economic growth at 5.3 percent in 2019 is still realistic,” she said.
Admitting that there is potential negative impact from the government’s import control policy, she pointed out that the government will manage the imports in such a way not to negatively impact economic growth while minimizing impact to the increase of current account deficit.
The finance minister also said that the government will also try to find the best way of anticipating the change of consumption preferebility among the public who tend to save their funds rather than investing to the real sector.
She said that through is policies the government will also encourage investors to invest as they tend to play save during the political year of 2018 and 2019. “Other than we’ll keep anticipating the potential global pressures, from the US Federal reserve and current trade wars between the US and China and other countries,” she said.
Other macroeconomic assumptions approved during the hearing are the unemployment rate which is set at 4.8-5.2 percent, poverty rate at 8.5-9.5 percent, economic inequality at 0.38-0.39 percent, and Human Development Index at 71.98.
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