Minister Of Home Affairs: Government Expenditure Is The Backbone Of Economic Growth

JAKARTA - Minister of Home Affairs (Mendagri) Muhammad Tito Karnavian said government spending, both central and regional, is the main backbone for national economic growth. Government spending is said to be able to encourage private sector spending.

Therefore, the Ministry of Home Affairs (Kemendagri) continues to encourage local governments to accelerate the realization of goods and services spending, one of which is through a Circular (SE) of the Minister of Home Affairs together with the Head of the Government Goods/Services Procurement Policy Institute (LKPP) Number 027/2929/SJ and Number 1 of 2021 concerning the Acceleration of the Implementation of the Procurement of Goods/Services in Regional Financial Management.

"This joint SE is very important because it can be a legal basis as well as a guide for regions in carrying out the procurement of goods and services," said the Minister of Home Affairs, quoted by Antara, Tuesday, June 1.

Accelerating the realization of government spending is expected to make more money circulate in the community, thereby boosting purchasing power at the household level. The increase is considered capable of hoisting national economic growth.

The Minister of Home Affairs also asked regional heads to increase capital expenditure in the second quarter of 2021.

This type of spending is considered to have a direct impact on the community. Moreover, the second quarter is the key to national economic growth.

"I ask friends of regional heads, please look at the proportion of capital expenditure properly," added Tito.

The Minister of Home Affairs also reminded that capital expenditures must be carried out through labor-intensive programs so that many parties receive the flow of funds, especially Micro, Small and Medium Enterprises (MSMEs). However, the procurement of goods and services through MSMEs must also pay attention to the quality and price of goods.

The push for increased spending on goods and services is related to the President's directive, which wants 2021 to become a momentum for handling the pandemic while at the same time restoring the economy better.

Based on data from the Ministry of Finance, economic growth in 2021 in the first quarter is still minus 0.67 percent. Even though economic growth at the end of 2022 is targeted to reach a plus 5 percent and above.