JAKARTA (TheInsiderStories) - Finance Minister Sri Mulyani still optimistic that government fiscal capacity could boost economic growth in the fourth quarter (Q4) of 2016 to 5.1 percent. For State Budget 2017’s financing, government plan to pre-funding through the issuance of government with worth Rp40 trillion (US$3.05 billion) in global or domestic market at the end of this year.
“We are open to publish them on the domestic market (auction and private placement) or global. In January we needs to pay salaries of civil servants, the general allocation fund transfer and some routine expensed worth Rp 116 trillion. We will pay the expenditure from SILPA, tax revenue, excise and non tax and the issuance of bonds,” She said at the joint press conference with Governor of Bank Indonesia Agus Martowardojo and Chairman of Financial Service Agency Muliaman Hadad at her office.
As is known, the government consumption in the third quarter of this is limited, so make the realization of a lower economic growth than the previous quarter. However, Sri Mulyani sure expenditures until the end of the year will be above 96 percent of the target.
However, the problem then appears on the revenue side. Therefore, the realization of tax revenue from a tax amnesty will not be as big as in the first period, especially in September. Related to that Sri Mulyani trying to convince, that the fiscal capacity is still sufficient to finance the expenditure until the end of the year.
In the calculations of government, throughout the fourth quarter later the government will encourage the expenditure of up to Rp 600.6 trillion and state revenues that will be collected Rp 486.1 trillion. It had calculated the amount of the budget cut conducted on regional transfer budget and government institution expenditures.
By that calculation, She continued, there is the rest of the financing to do around Rp 214.5 trillion. The amount is planned to be allocated to issue Government Securities in the domestic market and abroad.
Director General for Financing and Risk Management of the Ministry of Finance Robert Pakpahan explained, the government still has a cash cushion of the remaining budget (SAL), tax receipts, receipts and excise duties and non-tax revenues (non-tax) at the end of the year.
Robert ascertain, financing from the issuance of government securities for the end of this year sufficient to cover the budget deficit to 2.7 percent of gross domestic product (GDP). Of the total gross issuance of government bonds around Rp 650 trillion this year, the government stayed issuing SBN Rp 5 trillion more in this year.
Economic more robust in 2017
President Joko Widodo believed Indonesia economy more robust in 2017 showing by the latest economic growth movement in Q3 and will continue in the coming years. Same optimistic also owned by Coordinating Minister for Economic Affairs Darmin Nasution.
President and Darmin believed the economic growth in 2017 will exceed of 5 percent in 2017 and over than 6% in 2018. In the Stated Budget for 2017, the economic growth target set at 5.1 percent taking into account the GDP-forming component of household consumption, government consumption 5.09 percent, gross fixed capital formation 6.05%, exports 0.09 percent and import 0.02 percent.
On the structural reform side, the realization of economic policy package includes a two-stage-increased investment in infrastructure, improved ratings East of Doing Business, improvement of education and vocational training , agrarian reform, the downstream industry and tourism and logistics improvements are expected to pose a private confident to want to increase its investment.
Infrastructure spending plans next year to Rp 387.3 trillion for the construction of 815 kilometers of roads, 9 kilometer bridge, 13 airports, 55 seaports, 550 kilometer railway and bus terminal 3. While shopping onstruksi alone is projected to reach Rp 500 trillion of which is for the construction of 341 kilometers of toll roads with an investment of Rp 37.5 trillion. Some of the funds in providing land for the highway has been allocated in the state budget of Rp 20 trillion through public service agency.
“The private sector is expected to invest up to Rp 154 trillion or 27 percent of the required construction spending next year,” he said.
In addition, the government has outlined a number of projects snapper downstream industries, agro covers 19 projects worth Rp 123.6 trillion, 21 projects metals, machinery, transport equipment and electronics worth Rp 190 trillion as well as 32 projects of chemical industry, textile and miscellaneous demmi boost economic growth Rp 134.5 trillion. This is expected to trigger a scrolling effect to economic growth.
Director of Planning and Analysis Bappenas Macro Amalia Adiniggar Widyasari echoed the coordinating minister view. 2017, according to her, was a turning point for creating a better economy leads to 6%. This is because businesses and investor sentiment has been better with improved economic fundamentals.
Bank Mandiri economist Anton Gunawan commenting, Indonesia’s economic growth next year will be unchanged at 5.1 percent, unless there is an improvement of investment or business from significant private. Added, in terms of banking, asset quality problems and pressure on the NPL is expected to continue so that the credit growth to remain limited amid efforts to restructure and mengetatakan banking risk management.
“I think the creative industry such as e-commerce also needs to be the main agenda of the government. Currently e-commerce has developed rapidly and could be an opportunity for banks to develop the (credit) to a pioneering effort and fintech and encourage the financial institution as well as lower ketidakefisian banking, “he said.
While Adrian Panggabean, Chief Cconomy Treasury and Capital Market CIMB Niaga saw in the first half of next year’s economic growth will stagnate. Only in the second half there will be dynamic so that throughout 2017 there will be in the range of 5.1 percent.
According to the monetary side, there is still room 25-50 point reduction in the BI 7 days repo rate in order to encourage economic growth. In addition, there needs to be injection of funds 5 to 8 percent of GDP, or about $70 billion per year in order to Incremental Capital Output Ratio. In addition, the tax ratio also needs to be increased to a minimum of 14% so that the economy could lead to a 6 to 7 percent in the medium term.
“In 2025 the pressure immense job creation, and economic growth of at least 7 percent to be able to absorb the labor of it,” said Adrian.
