The economic growth target of 5.3 percent set by the government for the 2017 State Budget (APBN) is a realistic figure. That figure is up from this year’s target of 5.2 percent. Meanwhile, for 2018, growth can be projected at 7 percent.
This is according to a study conducted by the National Economic and Industry Committee (KEIN), a special body established by President Joko ‘Jokowi’ Widodo early this year. With 20 noted businessmen and economists as its members, KEIN analyzes government policies and programs and gives it creative advice. KEIN’s analyses cover prominent programs like infrastructure development and deregulation.
“The economic growth target of 5.3 percent as set by the government for 2017 is within the realistic and moderate category,” KEIN vice chairman Arif Budimanta said in a press statement on Saturday (20/8) as reported by bisnis.com.
On August 16, while speaking to lawmakers at the House of Representatives (DPR), President Jokowi officially disclosed the 5.3 percent growth target for the 2017 APBN. On the occasion, the President submitted to the House the 2017 Draft Budget (RAPBN 2017).
The President further stated as reported by The Jakarta Post, “The upcoming APBN needs to be realistic, able to uphold priority programs, credible, resilient and sustainable, whether in a short or medium period.”
He also said that 86 percent of the 2017 RAPBN’s total revenue target that amounts to Rp 1.73 quadrillion (US$132.26 billion) is predicted to come from tax revenues.
Meanwhile, the World Bank estimated in April of this year that Indonesia’s economic growth could reach 5.1 percent in 2016 and 5.3 percent in 2017.
Some analysts view that this year’s APBN targets are too ambitious. As reported by KONTAN daily, the analysts argued that by August, the realization of the 2016 revenue target is still far below expectations.
In regard to the 2017 RAPBN, economist Josua Pardede from Bank Permata said it is realistic enough. “Next year, the economy would show an upward trend and consumption would rise in line with the increasing of private investments as an impact of the implementation of tax amnesty,” Josua Pardede said.
Meanwhile, economist Lana Soelistianingsih from Samuel Asset Management warns about a potential fall in next year’s tax revenues. The current tax amnesty will end in March of 2017 and so taxes will no longer be a significant revenue source thereafter, she noted.