Chatib Unfazed by World Bank Growth Correction
21 July 2014 19:36 WIB
TEMPO.CO, Jakarta – Finance Minister Chatib Basri seems to be indifferent to the World Bank's correction of Indonesia's economic growth rate.
"They (World Bank) are rather conservative, but the [new] figure is still within our range, which is around 5.1 to 5.5 percent," Chatib said on Monday, July 21.
The World Bank World Bank held a press conference to correct their projection of Indonesia's economic growth from March's 5.3 percent to 5.2 percent. The correction was based on Indonesia's weakening commodity prices and credit sector, which caused the gross domestic product (GDP) to slip from 2011's 16.3 percent to 15.3 percent in 2013.
The World Bank asserted the need for structural reforms, especially related to fuel subsidies, which they said to be Indonesia's main cause of the current account deficit.
Chatib did not say much about subsidized fuel, only stating that a fuel price hike is necessary, but there is no date on when or if it will happen.
"It should be raised, but the current government can still overcome [the deficit] without raising fuel prices," he said.
The government opted to slash the budgets of several ministries instead of raising fuel prices, a policy some economists deem ineffective in narrowing the budget deficit.
AYU WANDARI
