Indonesia: Govt eyes higher GDP growth in 2020

  • The government has set a higher GDP growth target for 2020 than 2019 after taking into account the higher aggregate demand outlook for consumer spending, exports and investment.
  • Finance Minister Sri Mulyani Indrawati said on 23 Apr 19 that the government had set a higher economic growth target for 2020 than the target of 5.3% in 2019, while inflation was expected to hover between 2 and 4% – lower than 2019’s expectation of between 3.5 and 4.5%.
  • She added that growth would be boosted by increased consumer spending, investments and exports in 2020.
  • Consumer spending is targeted to grow by 5.2% in 2020, higher than the 5.1% target in 2019, while investment growth is expected to reach 7.5%, which is also higher than the 7% target set in 2019.
  • Meanwhile, export growth is projected to maintain its momentum and reach 7% in 2020, while the interest rate for the government’s three-month treasury bills (SPN) is predicted to be between 5 and 5.3%.
  • Sri Mulyani said the government had yet to decide on the rupiah exchange rate assumption against the US dollar for 2020’s budget in light of the dynamic factors that determined the rupiah’s value.
  • The Indonesian Crude Price (ICP), meanwhile, has been assumed to sit between USD60 and USD70 per barrel in 2020, slightly lower than the USD70 per barrel assumption in the 2019 state budget.
  • She said further details would become available when the government delivered its macroeconomic projection and draft fiscal policy (KEM-PPKF) to the House of Representatives (DPR) in late Apr 19, with the government’s final proposal expected to be delivered by Jokowi at the annual financial note address to the House in Aug 19.

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