RI Cuts 2016 Growth Assumption

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  • TEMPO.CO, Jakarta - The government, Bank Indonesia, and the House of Representatives' Finance Commission yesterday agreed on the macro assumptions for the 2016 State Budget draft.

    In the meeting, Finance Minister Bambang Brodjonegoro lowered his proposed assumption of economic growth to 5.5-6.0 percent in 2016. In last week's meeting, he proposed a growth assumption of 5.8 to 6.2 percent.

    Bambang projects a volatile economy in 2016, due to uncertainties about the Fed rate hike and conditions in Greece. If the Greek bailout scheme falls apart, the global financial markets' stability will be affected.

    Meanwhile, Bank Indonesia maintained its growth assumption of 5.4 to 5.8 percent.

    Global economic developments, BI Governor Agus Martowardojo said, will affect Indonesia's exports following commodity prices' improvement. Better consumption rate and purchasing power will also improve if the government materializes infrastructure development in the second half of this year.

    Six out of ten fractions in DPR; PDIP, Golkar, Gerindra, PKB, PKS and PPP agreed on the government and central bank's proposal. They said that a 5.5 to 6.0 percent growth rate is achievable, provided the government continues to boost investment and maintain trade balance.