TEMPO.CO, Jakarta - Bank Indonesia Deputy Governor Perry Warjiyo believes that the tax amnesty law will boost the economic growth in the fourth quarter of this year to 5.3 percent.
“Therefore, the target of economic growth at 5.2 percent can be achieved this eyar. In 2017, the economic growth may reach 5.5 percent. However, it depends on how much funds [repatriated to the country] and how the funds are invested in the real sector,” Perry said at the Finance Ministry in Central Jakarta on Wednesday, June 29, 2016.
Perry explained that funds repatriation will improve the liquidity, lower interest rates and strengthen the rupiah exchange.
"Those factors; in addition to fiscal stimulus, monetary relaxing, and macroprudential; can boost lending," Perry added.
Based on BI's calculation, bank credits are predicted to grow by 10 percent this year without the tax amnesty program. With funds repatriation, Perry said, the figure could increase to 12 percent.
"However, the growth will be higher in 2017. Without tax amnesty in 2017, credits may grow by 13 percent. With tax amnesty the growth could reach 16 to 17 percent," Perry explained.
Perry revealed that tax amnesty tariffs paid by taxpayers would serve as tax revenue to be invested in fiscal stimulus.
"The stimulus will boost the economic growth even higher and lower the inflation rate," he added.
In the future, Perry claimed that BI will safeguard funds from tax amnesty through its monetary and macroprudential policies. BI forecasted that this year's inflation rate would stand at 3.9 percent, and the current account deficit would stand at 2.1 percent.
"There will be a surplus in the balance of payment, and the rupiah exchange will strengthen, resulting in [monetary] relaxing," Perry said.
ANGELINA ANJAR SAWITRI
