http://news.xinhuanet.com/english/world/2012-09/11/c_131842882.htm
Indonesian central bank criticizes gov't growth target
English.news.cn 2012-09-11 13:33:05
JAKARTA, Sept. 11 (Xinhua) -- Indonesian central bank Governor Darmin Nasution
has warned that the government's target of 6.8 percent economic growth for next
year is too optimistic, citing slowing exports forecast for next year, local
media reported on Tuesday.
Darmin said Indonesia's exports were predicted to slow because its main export
destinations, particularly China and India, were expected to have slower
economic growth due to global financial woes.
"Although investment and consumption will remain OK, exports will slow down, so
it will be difficult to achieve a too-high economic growth target," Darmin said
here on Monday. "We suggest that the assumed economic growth should be within
the range of 6.6 and 6.7 percent."
Darmin was speaking during a working meeting with lawmakers to discuss the
draft of the 2013 state budget presented by President Susilo Bambang Yudhoyono
in his annual budget speech last month.
Finance Minister Agus Martowardojo said at the meeting that the government was
upbeat about the 6.8 percent growth target, which was higher than this year's
target of between 6.3 percent and 6.5 percent.
Last year Indonesia's economy expanded 6.5 percent, while in the first semester
this year it grew 6.3 percent.
Agus said on Aug. 17 that the government's optimism for a 6.8 percent growth
rate relied on expected strong growth in private consumption and investment.
He said the government would try to maintain a high level of consumption
through a plan to increase the non-taxable income threshold next year -- the
level of income each year that will not be taxed.
The current threshold for taxable annual income is 15 million rupiah (about
1,575 U.S. dollars).
The government has proposed a 36 percent rise in energy subsidy spending in the
2013 draft budget, with the country's energy- subsidy spending likely swell to
274.7 trillion rupiah next year from the target of 202.4 trillion rupiah in the
2012 revised budget. Next year's subsidy will include 193.8 trillion rupiah for
fuel and 80.9 trillion rupiah for electricity, the Jakarta Globe reported.
The government's policy on subsidies is part of its effort to maintain strong
household purchasing power and avoid potential massive protests.
International agencies are predicting lower growth for next year. The
International Monetary Fund forecasts Indonesia's economy to expand 6.1 percent
this year and 6.6 percent in 2013.
The Asian Development Bank estimates growth will pick up to 6.7 percent in 2013
from 6.4 percent this year.
The central bank has kept its key interest rate, the BI rate, steady at 5.75
percent for six months straight as it seeks to maintain growth momentum.
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