"Indonesia`s economy is still good and could still achieve 5 percent growth. But we must be very careful with regard to the current global economic challenges," Sri Mulyani said.
Jakarta (ANTARA News) - The Indonesian government will strive to achieve a 5 percent growth rate by the end of this year, Finance Minister Sri Mulyani said here on Thursday.

"Indonesias economy is still good and could still achieve 5 percent growth. But we must be very careful with regard to the current global economic challenges," she said after attending a seminar on global economic challenges.

Sri said the growth is expected to come from household consumption and so the government will maintain the inflation rate and keep it low or at around plus or minus 4 percent as has been projected.

"Consumption will be maintained through a low inflation rate and public confidence in continued consumption activities will remain," she said.

The government also hopes private investment would increase by this year-end due to inflows of repatriated funds from the tax amnesty program, the minister added.

"We are expecting investment from corporations, although some of them are conducting consolidation due to the declining prices of commodities. We are also expecting banks and corporations to be interested in it, especially due to inflows of repatriated funds," Sri explained.

The finance minister also said the government is expecting a recovery in exports and imports after the sector reported negative growth in the past decade due to weak demand.

"We have seen exports and imports grow negatively in the past ten years, but now it has become closer to a positive territory. We hope it will become relatively neutral by the end of the year," Sri stated.

In terms of policy, the government will still rely on fiscal policies to push growth despite hindrance from low tax income and a limited budget deficit.

"With regards to fiscal policy, we are using the existing space, but it also needs consolidation due to lower expectation of state revenue during the past two years," Sri said. (*)

Editor: Heru Purwanto
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