Middle Class Growth Stimulates Deficit, Analyst Says
17 August 2014 16:08 WIB
TEMPO.CO, Jakarta - President Susilo Bambang Yudhoyono said that the middle class in Indonesia continued to grow by 8 million people per year.
However, responding to this, Director of the Institute for Development of Economics and Finance Enny Sri Hartati expressed her concern about the increase as it not coupled with the growth in the real sector.
“Consumerism remains high but if domestic industries cannot meet the needs, it will be of no use,” Enny said on Friday, August 15, 2014.
According to Enny, consumerism among middle class is alarming as they cannot fulfill their needs with minimum domestic products, thus resulting in the growing import volumes that affect deficit growth of the trade balance.
Enny hoped that the government would pay more attention to the real sector it wants to increase middle class.
She cited that production sectors that have be developed, among others agriculture, industry, and mining and said that development of those sectors would open up job opportunities, increase middle class, and stimulate investment.
Enny said that so far, the government has only focused on trade, finance, and service and it has resulted in the social gap between the rich and the poor.
He further said that measures that the new government has to make are to focus on fiscal policies by strengthening incentives or facilities to the production sector.
CANTIKA BELLIANDARA