Jakarta, Feb. 9 (Antara) - Indonesia has continued to record an increasing economic growth over the last three years and it is being hoped that the country will maintain this trend.
To that end, the Indonesian government should continue to explore "driving machines" in order to boost the country's economic growth even further, such as offering attractive investment and tourism opportunities, experts have stated.
According to economist Professor Dr. Elfindri of the Padang-based University of Andalas, although the Indonesian economy has improved, yet the growth is slightly lesser compared with that during the administration of former president Soesilo Bambang Yudhoyono.
Elfindri argued that among other factors, Indonesia's economic growth was triggered by the end of economic recession in Europe and the improving economy of the United States (US).
"The end of economic recession in the US as well as Indonesia also encouraged economic growth in China," Elfindri said, when contacted by Antara from Pekanbaru on Friday.
He made the statement in response to a query about Indonesia's economic growth trend as showed by the Central Bureau of Statistics (BPS), which stated that the country recorded an economic growth of 4.88 per cent in 2015, which grew to 5.03 per cent in 2016. In 2017, the economy grew by 5.07 per cent, the highest growth since 2014.
As a result of the end to the US economic recession, however, Indian and Chinese economies experienced low growth, although it is still slightly above Indonesia. In addition, the declining economic growth patterns in China and Indonesia were similar but they experienced a slight recovery in the last few years and the reason is the improvement in international commodity prices.
India and China are two countries whose size can make economic growth easy and besides, they are also better in innovation and in improving the quality of industrial production.
"China has controlled export by controlling seaports in the Netherlands and now has the longest port in the world. India, with its cheap labour, has begun to dominate the IT market," Prof. Elfindri said.
Meanwhile, other low-growth economies still face internal problems, including the magnitude of external impact on their domestic economy. In the last four years, the real wages in Japan increased only in 2018, that too just slightly.
"Korea can be more enduring because its cultural strategy supports the growth of creative industries, where they are the most dynamic and productive," he said.
The international economic developments have also contributed to Indonesia's growth in the last several years.
Earlier, the International Monetary Fund (IMF) announced its assessment contained in Article IV of the Consultation Report for Indonesia 2017, which was discussed at a meeting of the IMF Executive Board in Washington D.C.
The report, based on a survey by the IMF, stated that currently Indonesia is in a conducive position to cope with various socio-economic challenges, backed up by improved performances in investment and exports that grow positively throughout 2017.
At the meeting, IMF Executive Directors welcomed both the focus of short-term policy mix of the government aimed at bolstering economic growth as well as the sustenance of the already successfully created stability.
The Executive Directors then suggested that adjustment in fiscal policy in 2018 should be sustained gradually to support economic performance and at the same time to create fiscal buffers.
In addition, the Executive Directors described the present monetary policy as quite adequate to sustain price stability and to back up economic development. It also recommended further increase in policy transmissions.
Currently, the Indonesian economic performance is healthier as could be seen from the steady economic growth, moderate inflation, and normal current account deficit, but there are always risks in capital flows that are not stable, they said.
According to Finance Minister Sri Mulyani Indrawati, Indonesia is set to maintain the good momentum in economic growth with state budget stability. "We are seeking the point of balance," Sri Mulyani said in Jakarta on Wednesday, while commenting on the latest assessment of the Indonesian economy by the IMF.
Sri Mulyani said one way of maintaining state budget performance stability was to keep under control the budget deficit below the maximum limit of 3 per cent of GDP allowed by the law. "With lower deficit, mainly to keep primary balance, we hope to create fiscal buffer as our economy is not always easy," she said.
Consolidation of the state budget to keep deficit under control could serve as a buffer against possible external turbulence. "Under a conducive situation, we make state budget more consolidated so that in the event of external shock, we still have space for intervention," Sri Mulyani, the former Executive Director of the World Bank, said. ***3***
(A014/INE) EDITED BY INE (T.A014/A/BESSR/A. Abdussalam) 09-02-2018 21: |
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