Photo: Finance Ministry

JAKARTA (TheInsiderStories) – With only a couple of days left before the New Year, Finance Minister Sri Mulyani Indrawati expressed her doubt that the country’s economic growth would reach the 5.2 per cent target set by the government in the State Budget of 2017.

She projected the country’s economic growth this year is now likely to be around 5.05 per cent or below the government’s target of 5.2 per cent. This prediction is also slightly below the World Bank and International Monetary Fund estimate, which projected the country’s economy to grow by 5.1 per cent this year.

“It is estimated that the overall economic growth for the full year 2017 will be 5.05 percent,” Indrawati said at a press conference on Dec. 20.

Minister said the estimated actual economic growth takes into account economic growth in the fourth quarter of 2017, which is projected within a range of 5.15-5.17 percent.

“The fourth quarter may be higher, close to 5.1 percent,” said her, who is also former Managing Director of the World Bank.

Indrawati explained that all components of economic growth in the fourth quarter of 2017 will be positive and contribute towards the end of the year. She expects the momentum improvement of economic performance by the end of 2017 to be a provision of increased activity in 2018, mainly from investment and exports.

“Next year, we expect steady export momentum and increased investment and above six or seven percent growth over the year,” she said.

The trends in 2017 have demonstrated positive economic indicators. For instance, in the third quarter of 2017, the communication and information services sector has grown year-on-year by 9.80 per cent, while other types of services have risen by 8.71 per cent.

Meanwhile, the transportation and logistics business has increased by 8.25 per cent, while the business-supporting services sector has grown by 8.07 per cent. Value-added tax (VAT) revenue has grown by 12.1 per cent; while VAT Refund for Tourists has grown by 10.46 per cent, with the arrival of foreign tourists having increased by 25 percent.

Indonesia’s export value from January to September 2017 has shown a year-on-year increase to US$123.36 billion, growing by 17.36 per cent.

Indonesia’s Investment Coordinating Board  Chairman Thomas Lembong said that with Standard & Poor’s upgrading Indonesia to ‘investment grade’, all relevant stakeholders must work in accelerating economic growth to increase investment volume, seizing the opportunity offered by Indonesia’s current stable macroeconomic conditions with inflation being adequately controlled and political conditions properly managed.

Written by Elisa Valenta, Email: elisa.valenta@theinsiderstories.com