"What could not be lowered in the past 10 years is the current account deficit (CAD), but through maximum economic transformation, we believe we could solve it in four years' time," he stated while opening the Kompas 100 CEO Forum for 2019 in Jakarta on Thursday.
Bank Indonesia (BI) recorded the current account deficit in the second quarter of 2019 to have reached US$8.4 billion, constituting three percent of the national gross domestic product (GDP). The figure rose 21 percent than the previous quarter’s US$6.97 billion.
The country's current account recorded a deficit of US$31.1 billion last year, representing 2.98 percent of the GDP, reaching $1.04 trillion. The deficit is the deepest since 2015, but nominally, it is the biggest than the earlier years.
"For umpteenth years, we have been dependent on commodities, either quantitatively or their prices. Commodity prices have always declined and affected economic growth. We also import oil and gas in large quantities, not to mention raw materials and capital goods," he stated.
BI noted that the oil and gas trade deficit in the second quarter of 2019 increased 14.3 percent to $3.2 billion, from $2.8 billion during the corresponding period last year.
"It will not be a problem to import goods if they are used to produce export goods. However, some of the capital goods are also used for domestic consumption," he noted
He remarked that the national economy was projected to record a growth of 5.04-5.05 percent next year.
"According to the World Bank and IMF, the global economy will likely slow down again next year due to global uncertainty. They told me to adopt a prudent fiscal policy. I agree to it since the state budget will contribute nearly 14 percent. This means that 86 percent of the money circulation rests with the private sector, including state-owned enterprises," he stated.
The state budget will only function as a driver of the economy, he noted.
The president also vowed to maintain the country's ratio of budget deficit to GDP.
"Our ratio of (budget) deficit to GDP is very cautious as compared to those of other countries. This year, the budget deficit is set at 1.9 percent (of the GDP). However, it may increase slightly to two percent. Next year, we set it at 1.7 percent, but it will likely increase, though it will lie below 3 or 2.5 percent," he added.
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