Indonesia's chief economic minister Darmin Nasution - Photo: TheInsiderStories.

JAKARTA (TheInsiderStories) – Indonesia needs an investment fund around Rp5803 – Rp.5823 trillion (US$410 million) to achieve the economic growth target of around 5.3 – 5.6 percent in 2019-2020, with investment growth (gross fixed capital formation) in the range 7.0 – 7.4 percent, said chief economic minister Darmin Nasution.

“Therefore the government is currently focusing on increasing exports and investment for quality economic growth. We need private contributions to reach Rp4221 – Rp4206 trillion or 72 percent of total needs,” he said in a written statement in Jakarta, Wednesday (06/26).

Southeast Asia largest economics supply-side policies also continue to be driven through infrastructure development, improvement of the business climate through the online single submission (OSS) system and other licensing simplifications, vocational education and training, tax incentive facilities, and export-based industries.

Amid global uncertainty, Indonesia’s economic growth was able to grow 5.17 percent on an annual basis (YoY) in 2018 and continued in the first quarter of 2019 which was able to grow 5.07 percent (YoY). This was offset by a low and stable inflation rate of 3.23 percent (YoY) in May 2019, Statistics Indonesia showed.

“This condition is accompanied by a level of social indicators such as poverty, unemployment, and persistent Gini ratios,” Nasution adds.

However, one of the challenges due to global uncertainty is Indonesia’s trade balance experiencing deficit pressure. During January to May 2019, the trade balance was a deficit of $ 2.14 billion. However, in May 2019 the trade balance was able to a surplus of $0.21 billion.

Although the trade balance deficit, investor optimism is still high. This is reflected in the increase in credit rating by rating agencies. Currently, Indonesia has entered Investment Grade,” he said.

Furthermore, the International Institute for Management Development (IMD) also assessed Indonesia’s competitiveness ranking to increase by eleven ranks. The increase was due to increased efficiency in the government sector as well as improvements in infrastructure and business conditions.

Nasution explained, President Joko Widodo’ government continued to boost infrastructure development to increase economic growth and attract investment. The government is preparing the construction of a national strategic project worth Rp4,150 trillion with 223 projects plus 3 programs.

Until May 2019 a total of 15 projects have been completed plus 12 projects estimated to be completed by September 2019.

“So, the accumulated number of projects to be completed until the third quarter of 2019 is estimated at 89 projects,” he noted.

Nasution adds funding for infrastructure development originating from the state budget is still limited. For this reason, an alternative financing scheme that involves the private sector is needed. Up to 2019, the private sector is targeted to be fulfilled by 58 percent.


Written by Lexy Nantu, Email: