Govt ready to mitigate slower pace of growth in RI

JAKARTA. The government is preparing several short- and long-term mitigation policies to overcome the country’s slowing economic growth caused by uncertainties in the global economy, says Finance Minister Chatib Basri.

Chatib said that in the short term, the government would push the realization of foreign-currency-denominated financing sources through the issuance of government bonds and increasing the participation of state-owned banks in maintaining liquidity.

He said the government had also increased the fiscal space in the 2014 state budget for public transportation, infrastructure, and social security and strengthening coordination measures to maintain the stability of financial system.

“The government is ready to activate ‘bond stabilization framework’ by, among other things, increasing coordination with the State-Owned Enterprise Ministry and related state-owned companies,” said Chatib on Tuesday evening.

As a long term policy, the government is trying to improve the current account deficit by pushing increases in exports, managing imports, and improving investment climates.

“We are doing this by providing fiscal instruments. These include a ‘tax allowance’ revision by simplifying procedures and a ‘tax holiday’ revision by adding more sectors and relaxing requirements on the investment period and minimum amount,” he said.

Chatib said that other mid-longer term policies included the implementation of macro-prudential policies to reduce the volatility and susceptibility of the national economy from external fluctuations. (ebf)