Third stimulus package likely to be released Thursday

07, Oct 2015 | Author: Embassy of Indonesia

Source  :  Jakarta Post

Presidential chief of staff Teten Masduki says it is probable that the government will announce its third economic policy package on Thursday, reports.

Speaking at the Presidential Palace in Jakarta on Thursday, Teten said it was also probable that a new fuel price policy and other efforts to boost people’s purchasing power would be among several measures included in the package.

“The short-term policy will still be focused on efforts to tackle issues around people’s purchasing power and food problems,” he said. Meanwhile, the middle-term policy will be directed at easing investment procedures.

“Stimuli requested by businesspeople are mainly related to taxes and easier investment regulations,” said Teten.

Earlier, the government issued its first and second economic stimulus packages, which were aimed at countering the challenges of the global economic slowdown.

On Monday, President Joko “Jokowi” Widodo asked all parties to remain optimistic in facing the current economic slowdown. He said he was certain that in the second semester of this year, Indonesia’s economic growth could increase, supported by budget absorption, which was improving.

“I’m sure that in the second semester, our economic growth will increase. The economic growth of some countries has now dropped by more than 1 percent, whereas our growth dropped by only 0.3 percent,” Jokowi said as quoted in Tangerang on Monday.

He did not explain in detail Indonesia’s economic growth forecast for the second semester of 2015 though claimed that he had received data that showed that the country’s growth would certainly increase.

“[…] the realized expenditure of the State Budget [APBN] and local budgets [APBD] at provincial, regental and municipal level is already above 60 percent. The APBN’s realized expenditure is already at 64 percent,” he said.

The President said he was targeting an APBN absorption of between 92 to 94 percent by the end of this year, which, he said, would hopefully boost Indonesia’s economic growth.

Earlier, Jokowi predicted that Indonesia’s economic growth would skyrocket starting from September. He made the statement in response to the decline in the country’s economic growth in the second quarter of this year to 4.67 percent from 4.7 percent in the first quarter.

Meanwhile, the World Bank (WB) forecasts Indonesia’s economic growth will be 4.7 percent this year, and 5.3 percent in 2016.

As stated in its East Asia and Pacific Economic Update published on Monday, the WB expects Indonesia’s gross domestic product (GDP) to grow by 5.3 percent next year, lower than its previous prediction of 5.5 percent.

“Weaker commodity prices are expected to continue to put pressure on profits and incomes, constraining domestic demand growth,” the report says. (ebf)

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