Minister of Finance Purbaya Optimistic that the Indonesian Economy Will Reach 6 Percent Despite the State Budget 5.4 Percent

JAKARTA - Finance Minister Purbaya Yudhi Sadewa is optimistic that economic growth next year could reach 6 percent, surpassing the 5.4 percent assumption in the state budget.

He said the opportunity was opening up because policies were becoming more in line with the central bank and the conditions of the last two weeks "have been very good".

"Even though in the state budget 5.4, I will force it to push to 6 percent," Purbaya told reporters at the Ministry of Finance, Jakarta, Wednesday (31/12).

Purbaya alluded to the previous issue when the real sector - including the textile industry - had difficulty getting credit even though the project was ready, there were buyers, and collateral was available. According to him, this happened because banking liquidity was not enough. In the future, he said, conditions will be different because of improvements in liquidity and distribution through KUR.

He also said that the primary money (base money/M0) indicator was returning to double digits, leading to around 13 percent, as a sign of the central bank's contribution to the economy.

In terms of fiscal policy, government spending this year will still grow by around 4-5 percent and is considered "quite good", although not double digits.

However, state revenues are slightly below forecasts, so the deficit widened from the initial estimate.

The details of the figures will be displayed next week because the movement of receipts is still ongoing until the last seconds of the year.

Purbaya explained that looser liquidity would encourage banks to channel funds into instruments that provide better returns to credit because holding money actually costs money.

He dismissed claims that no one borrowed in the economy.

According to him, credit usually starts to grow more significantly 3-4 months after money enters the system, while economic activity moves faster in 2-3 months.