Indonesian government projected the economic growth between 5.4 to 6 percent in 2022 from this year' targets around 5.3 percent - Photo by Finance Ministry Office

JAKARTA (TheInsiderStories) – Indonesian government projected the economic growth between 5.4 to 6 percent in 2022 from this year’ targets around 5.3 percent, said finance minister today. While, the budget deficit is seen at 4.51 – 4.85 percent of gross domestic product (GDP) or equivalent to Rp879.9 trillion (US$60.68 billion), from 2021 at 5.7 percent of GDP.

Sri Mulyani Indrawati explained, the deficit targets still a long way from returning to its legal limit 3 percent of GDP by 2023. Last year, the government had lifted the budget deficit cap to pour money into stimulus programs and cushion the blow of the COVID-19 outbreak.

The calculation, she revealed based on the state revenues projection around Rp1,823.5 trillion to 1,895.4 trillion with tax revenues about Rp1,499.3 trillion to Rp1,528.7 trillion. While, the government spending is estimating around Rp2,631.8 trillion to Rp2,775.3 trillion and the debt ratio 43.76 to 44.28 percent of GDP.

At the same briefing, national developing minister, Suharso Monoarfa, added to support the government targets the country must boost the investment growth. In 2022, he said, Indonesia needs an investment over than Rp5,000 trillion. In detailed, 80 percent is projected come from the private sector and from the state budget about Rp497 trillion.

The number of unemployment is also expected drop to 6.2 percent and poverty levels to improve at 8.5 – 9 percent. In this year, President Joko Widodo was optimistic that Indonesian economy will grow 5 percent with various efforts by the government. In the 2021 State Budget, the Southeast largest economy targeting the economy to grow 4.3 to 5.0 percent after contracted 2.19 percent in the previous year.

“Due to the pandemic our economy in uneasy situation. Therefore, we all have to work hard to accelerate our national economic recovery. The target our economic growth growth must reach 5 percent,” he told trade ministry officials on April 3. He urged, his staff work more detail and analyzed which sectors are disrupted and what to do with their problems.

If needs an incentive, he asserted, the government must give it. Then, he also pushed the officials to inviting new investment to the country. According to the former Jakarta governor, investment, exports and job creation are the keys to Indonesia’ economic growth.

“The key to our economic growth growth is in investment. Because it is impossible for us to drastically increase our state budget,” adds by the head of state.

In this week, the International Monetary Fund (IMF) has reported their outlook on Indonesian economy. The real GDP is projected to expand by 4.8 percent in 2021 and 6 percent in 2022, led by strong policy support measures, including increased public investment and COVID-19 vaccine distribution plans, as well as improved global economic and financial conditions.

Then, inflation is projected to rise gradually to 3 percent at end-2021. The current account deficit is projected to widen to 1.5 percent of GDP in 2021, reflecting higher imports driven by economic recovery. And Credit growth is expected to pick up in 2021 with stronger activity, albeit remaining below nominal GDP growth due to increased risks to asset quality and bank profitability.

The uncertainty surrounding the growth outlook is nevertheless larger than usual. Early widespread vaccination is an upside risk, while delays could lead to a more protracted pandemic, a downside risk. The macro-financial fallout of the pandemic and economic downturn could be larger-than-expected, and credit conditions could be slow to improve.

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Written by Editorial Staff, Email: theinsiderstories@gmail.com