JAKARTA. Government and the House of Representatives (DPR) have agreed on 2017 State Budget Plan (RAPBN 2017) to be legalized as a law.
The 2017 State Budget Plan set the economic growth assumption at 5.1%, inflation target at 4%, three month treasury bills or SPN’s rate at 5.3%, State Budget Plan’s deficit, and rupiah exchange rate at IDR13,300 per US$1.
The agreement also included the amount of subsidies, non-oil and gas revenues target, oil and gas revenue target, as well as targets of non-employment rate, poverty rate, gini ratio, and human development index (HDI or IPM).
Head of Fiscal Policy Agency Suahasil Nazara claimed that the 2107 State Budget Plan was drafted referred to the realization of state’s revenues in 2016, not to 2016 State Budget.
The targets for state’s revenues in 2017, including revenues from taxes, customs, as well as non-taxation state’s revenues have also made in accordance with the realizations in 2016.
Analyst at Samuel Aset Management Lana Soelistianingsih said that the macro assumptions on the 2017 State Budget Plan are realistic. Lana added that the target economic growth at 5.1% is realistic under several conditions.
First, government has to optimize government expenditure without budget cut. Second, government has to maintain household consumption growth, since household consumption contributes most to economic growth, and third, government has to be able to maintain export commodities’ prices.
Economist at Bank Central Asia (BCA) David Sumual said that government has to formulate special policy to maintain investment growth at about 7% in order to meet the targeted economic growth. “Currently, investment growth is stagnant at the rate of 5%,” David said. In this case, investment will support economic growth amid the slow export and global economy.
Government also has to focus on potential sectors that may absorb massive work forces, such as manufacture and agriculture sectors.
General Chairman of Indonesian Textile Association (API) Ade Sudrajad expected that the government’s 13 policies on investment may take into effect in 2017. It is expected that the policies may jack up investment and domestic economic growth. “Amid the slow global economy, government needs to strengthen trade negotiation to support export,” Ade said. (Translator: Muhammad Farid)
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