Budget Cut Won`t Affect Economic Growth: Minister Darmin

TEMPO.CO, Jakarta - Coordinating Economic Minister Darmin Nasution expressed optimism that state budget cuts would not have a significant impact on the economic growth.

“The GDP growth has nothing to do with the government spending,” Darmin said at his office in Jakarta on Friday, September 2, 2016.

Darmin added other factors contributing to the economic growth were household consumption, exports, and imports. He explained that as long as the investment realization was in line with expectations and the government spending decreased, the economic growth would not be affected.

“The impact would be felt if all of those factors declined,” he said.

Despite being harder to achieve, Darmin expressed optimism that the economic growth target set at 5.2 percent remains attainable. According to him, the investment sector shows promises in boosting the economic growth.

Several investments to be realized this year include the 35,000-megawatt electricity project. The Minister revealed that the project had progressed to the financial closing stage.

Earlier, Finance Minister Sri Mulyani announced state budget cuts of Rp137.6 trillion (US$10.5 billion), which was higher than that proposed earlier. In the previous plan, the government did not include the village fund to be slashed.

VINDRY FLORENTIN