JAKARTA - The Ministry of Finance (Kemenkeu) stated that government spending which will continue to increase until the end of the year provides its own advantages for Indonesia.
The reason is, this strategy is believed to be an important support in the formation of national gross domestic product (GDP).
This was revealed by the Minister of Finance (Menkeu) Sri Mulyani when she was a keynote speaker at the UOB Indonesia Economic Outlook 2023 forum.
According to the Minister of Finance, one of the important points is government spending related to subsidy payments and compensation to business entities.
The government will pay subsidies and compensation. Currently, it is still in the verification stage and will only appear in October," he said, Thursday, September 29.
The Minister of Finance added that the value of spending that supports the needs of the community has not been fully paid by the government.
The value of subsidies and compensation that has been paid (to business entities) is only around Rp. 200 trillion from the total allocation of Rp. 502 trillion. This is also what causes government spending to be strong in the fourth quarter," he said.
The projection of Indonesia's positive economic growth is actually inversely proportional to global conditions which are believed to have weakened before the end of the year.
This is timing according to the time the world is starting to weaken. We have all seen growth in the second quarter and have even slowed down and will continue in the third and fourth quarters, said the Minister of Finance.
This assumption is based on developments that show an increase in inflation accompanied by a central bank response to increase interest rates.
"This makes many countries have its economic growth revised down while we are still climbing," he continued.
Therefore, the Minister of Finance said that the government is still optimistic that it can achieve growth in the range according to the target.
"For 2022 overall we may maintain economic growth above 5 percent," he said.
According to VOI records, the world economy is believed to only be in the range of 2 percent for 2022 and 2023.
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