JAKARTA - Minister of State Secretary Prasetyo Hadi denied the budget efficiency policy in ministries/agencies ordered by President Prabowo Subianto triggered a slowdown in national economic growth in the first quarter of 2025.
Indonesia's economic growth in the first quarter of 2025 was at the level of 4.87 percent (year-on-year/yoy), lower than the achievements of the last few years.
"With the efficiency process when related, for example, although it is not always directly related, then you look at it, the efficiency process is budget reallocation, directed at more productive activities," said Prasetyo when giving a statement to the media at the Presidential Palace, Jakarta, Friday, May 9.
Prasetyo explained that the slowing condition of economic growth was not related to budget efficiency policies.
According to the Minister of State Secretary, declining economic growth is not only influenced by one particular factor. Government spending that has not been maximized in the first quarter also affects national economic growth.
On the other hand, the government is also reallocating the budget for more productive activities. This can be seen in economic growth in the agricultural sector which grows above 10 percent.
In addition, geopolitical conditions, such as the latest war to resipprocal tariff policies imposed by US President Donald Trump, also prevent Indonesia's economic growth from growing above 5 percent.
"In the world's geopoliticals, we also hope that some conflicts will be resolved soon, but the old ones have not been resolved, now it's getting newer. It's only more now that our brothers and sisters in India and Pakistan are arguing," said Prasetyo.
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Chairman of the National Economic Council (DEN) Luhut Binsar Pandjaitan on the previous occasion stated that corrections to economic growth could occur during the transitional government, such as at the change of cabinet in 2014.
"However, everyone needs to know that this pattern is not new. Because during the 2014 transitional period, the first and second quarters also grew below 5 percent. This means that in a period of adjustment like this, a slowdown could occur," Luhut said on his Instagram account @luhut.pandjaitan, quoted in Jakarta, Wednesday (7/5).
One of the main factors in this economic slowdown is the contraction in government consumption. Therefore, said Luhut, the acceleration of state spending is key.
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