Indonesian government and House of Representatives The House' budget committee approved the government regulation in lieu of law Number 1 of 2020 regarding State Finance and Financial System Stability for Handling the COVID-19 Pandemic in Order to Face Threats that Endanger of the National Economy or Financial System Stability - Photo: Privacy

JAKARTA (TheInsiderStories) – Indonesian government and House of Representatives have approved the macro assumptions and development targets for 2020 which were decided by the budget committee in Jakarta on Monday (07/8).

The largest Southeast Asia economic’s growth is pegged in the range of 5.2-5.5 percent in 2020. This figure is actually lower than the government’s first initial target of 5.4-5.6 percent. These estimates are considered realistic given the global economic conditions that tend to weaken.

The inflation rate was also agreed in the range of 2.0-4.0 percent in 2020. The figure was assessed in accordance with the general strategy of controlling inflation with the affordability of prices, the supply of goods, and smooth distribution.

This achievement was mainly supported by the general strategy of controlling inflation with the affordability of prices to ensure the availability of supply and the smooth distribution, communication to maintain inflation expectations.

Meanwhile, the US dollar exchange rate is projected to be in the range of Rp14,000 to Rp. 14,500, down from the initial assumption of Rp14,000 to Rp15,000. The trade war and global uncertainty are the main factors that will influence exchange rates.

The 3-month treasury bills interest rate is estimated to range from 5.0-5.5 percent, initially pegged at 5.0-5.6 percent. This figure is based on global financial uncertainties that drive capital outflows to safe havens and the risk of a current account deficit.

Furthermore, the Indonesian Crude Price is estimated to be at US$ 60 to $70 per barrel considering the crude oil price which is still influenced by geopolitical turmoil such as US sanctions on Iran and Venezuela. Uncertainty over the sustainability of production cuts by OPEC as well as the continuation of trade wars are also considered factors.

Then, oil and gas lifting is estimated in the range of 695,000-840,000 barrels per day for oil lifting and 1,191,000-1,300,000 barrels of oil equivalent per day for natural gas lifting. This figure is pegged based on a decline in natural products due to old oil and gas wells and no new oil well exploration activities.

The government considered that the external factor is still the main consideration in establishing the macro assumptions. Especially, the trade war between the US and China has been burdening the world’s economy, while the end of it is still unclear until now.

While for the 2020 development target, the government agreed on unemployment targets from 4.8 to 5.1 percent, poverty from 8.5 to 9 percent, Gini ratio from 0.35 to 0.38, and human development index from 72.52.

Written by Lexy Nantu, Email: