This growth slowed as compared to the previous quarter which grew 5.05 percent, which was also slow compared to the same quarter last year when it grew 5.17 percent.
The founder of the research institute and economic policy Sigma Phi Indonesia, Arif Budimanta argued, although the economy is still growing positively, but the realization of the latest growth data is a warning that the national economy is facing structural problems and, therefore, has not been able to grow fast as desired by President Jokowi, namely above 7 percent.
"The national economy is exacerbated by slowing global economic conditions and increased risk of uncertainty," Budimanta said in a statement received in Jakarta, Tuesday.
The net export and investment components which were expected to grow and change the structure of the GDP experienced a significant slowdown. That had failed to transform the structure of Indonesia's GDP, which until now was still heavily dominated by the consumption sector, he said.
When compared with the same period in 2018, the share of investment and net exports to growth has declined. Last year, gross fixed capital formation (PMTB) contributed 2.24 percent to economic growth, while this year only 1.38 percent.
Although the share of net exports improved from -1.1 percent in the third quarter of 2018 to a positive 1.81 percent in the third quarter of 2019, it was more caused by imports contracting 8.61 percent (y-o-y) while exports only grew 0.02 percent.
Another figure highlighted by Budimanta is the growth of government consumption expenditure which only grew 0.98 percent so that its driving force on the national economy was only 0.08 percent in the third quarter of 2019.
The small impetus for government consumption is quite surprising because usually in the third and fourth quarters, government consumption becomes a significant driver of economic growth.
In addition to accelerating government spending in the next quarter, many national economic potentials could still be utilized to encourage growth while changing economic structures to become more qualified and equitable, he asserted.
First, taking advantage of the downward trend in interest rates at the global level accompanied by a flood of liquidity on global financial markets to drive the progress of MSMEs in Indonesia.
"The results of our simulation, if we can encourage 10 percent of SMEs to move up the class (micro to small, small to medium, etc.), will help our economy grow 7.3 percent per year," he stated.
Second, is to implement a regional growth strategy where the potential of the region is truly mapped and developed. In a short period, economic growth can accelerate while reducing economic inequality between regions. One indicator of whether our economic direction has led to the strategies mentioned is to examine the large proportion of credit to these sectors.
As an example, is the composition of business operators in Indonesia where MSME entrepreneurs are currently 99.99 percent with a contribution to the GDP of 60 percent.
"But if we look at the distribution of bank financing, only 20 percent is channeled to MSMEs. So, with increased access and distribution of bank financing to MSMEs, the driving force for growth will be very large," Budimanta remarked.
Likewise, if the mismatch in the distribution of bank financing to development needs in the region can be corrected, the effect on the economy will be significant.
This government must give new hope so that it provides optimism to the market because it expects a new "breakthrough" from the economic team in the Advanced Indonesia Cabinet.
"Therefore, this relatively slow pace of economic growth must be answered by the work of the economic team of the new cabinet which must be faster," hes in conclusion.
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