Government projects 5.3 to 5.6 percent GDP growth in 2020

MACROECONOMICS - JAKARTA. The government on Monday submitted the macroeconomic assumption and basic fiscal policy for the 2020 state budget, which among other things proposed a gross domestic product (GDP) growth projection of 5.3 to 5.6 percent.

The projection is lower than the figure in the 2019 state budget, which is 5.4 to 5.8 percent.

Finance Minister Sri Mulyani Indrawati said the global and domestic condition would still cast a shadow over the country’s economy in 2020.  

She said the trade war between the United States and China would become a major threat to global economic growth and would affect the Indonesian economy because it could hamper Indonesian exports.

“By considering all the potentials, opportunities and risks that are expected to come next year, the government proposes the macroeconomic indicators to draft the 2020 state budget,” the minister said in front of House of Representatives members in Jakarta on Monday.

Inflation was set at 2 to 4 percent, the interest rate for three-month treasury bills (SPN) at 5 to 5.6 percent, the rupiah exchange rate at Rp 14,000 to Rp 15,000 per US dollar, the Indonesian Crude Price (ICP) at US$60 to $70 per barrel, oil lifting at 695,000 to 840,000 barrels per day and gas lifting at 1.19 million to 1.3 million barrels of oil equivalent per day (boepd).

Sri Mulyani said the theme of the fiscal policy in the 2020 state budget was enhancing competitiveness through innovation and the improvement of human resources.