Indonesia Finance Minister Chatib Basri said on Monday that the government is making efforts to boost consumption in order to keep the country’s economic growth above 6 percent this year.
“There is a measure that we are preparing, and the president calls it the ‘keep buying’ strategy, because the majority of our gross domestic product is from consumption,” Chatib told the state-run Antara News Ageny. “Therefore, if consumption is strong, our GDP can be saved.”
According to Chatib, expenditures related to household consumption dominate the GDP, and they grew by 55.44 percent in the first half of this year. Gross Capital Formation grew by 32.68 percent, government consumption by 8.63 percent, exports by 23.15 percent and import 25.72 percent.
“Bank Indonesia estimates that Indonesians spent Rp 110 trillion during the current exodus season,” Chatib said. “Compared to the new state budget of Rp 1,600 trillion, it has a huge effect on growth.”
The bonuses paid before Ramadan in June and an acceleration in budget absorption also affected government consumption and the national economy in the third quarter.
“Household consumption and government expenditure will push the economy, because investment is already beginning to slow down and we cannot rely on export growth,” Chatib said. “The 6.3 percent target is a bit difficult, because it means that we should be growing 6.6 percent [in the next half], and that is difficult. However, if we are looking at around six percent, it is still possible.”
The Indonesian Statistics Agency (BPS) recorded an economic growth of 5.81 percent in the second quarter, a figure that brought cumulative growth for the first half to 5.92 percent.
According to BPS, growth was buoyed by household growth in household consumption by at 5,06 percent, government consumption by 2.13 percent, investments by 4.67 percent, exports by 4.78 percent, and imports by 0.62 percent.