JAKARTA (TheInsiderStories) - Minister for National Development Planning/Head of Bappenas Bambang Brodjonegoro sees Indonesia will enter the high-income countries by 2034 with a record growth should average 6.4 percent per year. He also sees the domestic economy will grow 5.1 percent to 5.3 percent in 2017 from this year estimate 5.0% driven by consumption spending.
“Is not easy to reach those target because we face global economic risk from China, United State (U.S) and also from domestic,” He said at the press conference of Economic Outlook at the minister office.
From China, Bambang explained, the global economy will affected by China’s policy to finance the government and private’s debt and the possibility of drastic economic policy from U.S.
He continued, U.S president elected Donald Trump policy to cut tax revenues for conglomerate and corporate from 35 percent to 15 percent, dropping state revenues to 75 percent, cutting spending, new tariff from 35-45 percent for China and Mexico, deportation 500,000 illegal immigrant per year and increase the minimum wage for after office to $15 per hour will affected the global economy.
“All risks are stopping through PE investments will disturb us. China’s economic slowdown will reduce demand for export. The impact of greater China to Indonesia than the US, “said Bambang.
According to him, U.S economy predicted grow1.5 percent in 2016 and improve to 2 percent in 2017. While China’s economy will dropped stagesly from 6.6 percent in this year to 6.3 percent in 2017 due to non-performing loan risk from government dan private’s debt.
Otherwise, European Union economy is estimating going slower, Japan unchanged and India will rises to 7.5 percent. Indonesia economy itself is predicted will grow 5.01 percent in fourth quarter of 2016 and in the whole year at 5.0 percent or improved from 2015 4.9 percent driven by consumption and investment.
Domestically, He added that economic growth in the drive by private and government agencies absorption patterns. If there is a delay in spending in first quarter alone will reduce economic growth 0.15 percent and by if pile up by the year-end there is the potential reduction in 0.47 percent.
To anticipate the global and domestic risk on domestic on domestic economy, Bambang said, Indonesia must take policy action like lowered the lending rate by increasing banking efficiency, decrease in deposits interest rate, regular monitoring of the banking industry, keep inflation in lower level, repatriation of funds utilization for real sector, repair absorption patterns and the level of government investment budget realization, implementation of strategic infrastructure projects and the allocation of appropriate government investment spending.