Jakarta (Antara Bali) - The Center of Reform on Economics (CORE) has predicted that the Indonesian economy may grow at a rate higher than 5.3 percent assumed in the 2016 state budget.
This can be achieved if fiscal policies are coordinated to support the real sector, as per CORE.
The 2016 economic growth will stay within a range of 5.2-5.4 percent, driven by household consumption and government expenditure, CORE executive director Hendri Saparini said here on Wednesday.
"Our projection is not too optimistic," he said at a CORE economic Outlook gathering.
"The household consumption growth of 5.3 percent, government expenditure growth of 7 percent, and investment inflows will boost the 2016 economy," he said.
Hendri said the 2016 state budget, which reaches Rp2,095 trillion, is an expansive budget instrument.
Yet, the government should not repeat the same problem in 2015, including slow realization of the state budget and low state receipts, particularly from tax revenues.
"If the 2016 state budget is managed properly, it will give greater stimulus," he said, adding that the governments focus on prioritizing expenditure in the labor-intensive sector will lead to a boost," he said.
Hendri further stated that the target of the governments fiscal policy must cover many areas in the manufacturing sector.
The government needs to benefit from the chance that it may not need to raise the prices of basic necessities, such as fuel, as the global oil price fell to US$50 per barrel, he said.(WDY)
