JAKARTA (TheInsiderStories) – Amid the slowdown of global and domestic economic, the Government targets non-oil and gas export growth by 7.5 percent or worth of US$175 billion this year. In 2018, a total of 25 major non-oil and gas export commodities amounted to $139 billion from $132 billion a previous year, said senior minister on Wednesday (03/13).
Minister of Trade Enggartiasto Lukita revealed, to achieve the target, there are three important things that the government does, such as developing an integrated information system, simplify the rules and procedures for exports and imports, and create of trade agreements, trade missions, and trade expose.
“For this reason, the Ministry requires hard work and strong cooperation from all levels, Governors, Regents, Mayors, Offices and Market Management Teams in all corners of the country,” he said.
The global economic slowdown as Minister Lukita acknowledged was evident from the the World Bank effort to cut world economic growth from 3.0 percent to 2.9 percent in 2019. Similarly, the International Monetary Fund reduced world economic growth from 3.7 percent to 3.5 percent this year. In March 2019, the OECD also corrected the growth of the world economy from 3.6 percent to 3.3 percent.
In addition, the economic slowdown is also predicted to occur in the ASEAN-5 region (Indonesia, Malaysia, Philippines, Thailand, Vietnam) which grew 5.1 percent in 2019 from the 2018 estimate of 5.2 percent.
Last year, Indonesia’ economic growth fell to 5.17 percent below the State Budget macro assumption of 5.4 percent, with inflation which was quite low at 3.13 percent. However, the position of foreign exchange reserves at the end of 2018 was recorded at $120.65 billion, down from 2017 at $130.2 billion.
Moreover, Indonesia also got a wide current account deficit, from $16.2 billion (-1.6 percent of GDP) in 2017 to $31.06 billion (-2.98 percent of GDP) in 2018. The drivers of the deficit were a goods deficit of $0.43 billion, a service deficit of $7.1 billion, and a primary income deficit of $30.42 billion.
As of January 2019, Indonesia still has a trade balance deficit of $1.16 billion, driven by the oil and gas deficit of $0.45 billion and a non-oil and gas deficit of $0.70 billion. While in January 2019, Indonesia’s total non-oil and gas exports had reached $11 billion, up by 73.6 percent from the previous year.
Therefore, Lukita added, the government will continue to strive to maintain price stability and availability of basic commodities. In 2019, the government targets inflation of 3.5 percent with controlled prices of basic necessities, especially prices of staples in national holidays. In February 2019, the inflation rate fell by 0.08 percent and 2.57 percent in annual basis.
It’s estimated that Indonesian economic growth this year according to the State Budget macro assumption is 5.3 percent with inflation of 3.13 percent. While the macro assumption of economic growth in 2020 is estimated to be in the moderate range (5.3 percent – 5.6 percent) taking into account the still high risk, with inflation of 2.0-4.0 percent.
Furthermore, to improve export performance and expand market access, the government will continue to increase the number of international trade cooperation and optimize the role of the digital economy to improve Indonesia’s digital competitiveness.
In addition, increasing efforts to market people’s market products so they can enter the online ecosystem so that they have their own marketplace platform to compete in the digital era.
“For this reason, there must be regulations and electronic commerce governance that bring great benefits to businesses and the public, especially in terms of goods supervision and consumer protection,” he said.
Written by Daniel Deha, Email: email@example.com