"The government`s position is to set economic growth target at 6.2 percent," the minister said here on Wednesday.
He said that the agreement to set the target at a range of 6.2 percent and 6.5 percent constituted a result of a dynamic meeting between the government and Commission XI of the House of Representatives (DPR).
"There were various assumptions during the meeting. Some proposed 6.5 percent and some others wanted to set it at 6.3 percent. Thus, Commission XI decided a range of between 6.2 percent and 6.5 percent," the minister said.
But the government will maintain the 6.2 percent target, which is realistic with the present economic condition, the minister said.
"It will still be discussed in a meeting with the House`s Budgetary Body, but the government`s position is to maintain the 6.2 percent," noted Chatib.
In a working meeting on Tuesday (May 28), the government and Commission XI agreed four macro assumptions in the 2013 Revised State Budget, namely economic growth, inflation rate, the rupiah exchange rate against the US dollar and the interest rate of three-month state treasury securities (SPN).
The economic growth was set at a range of 6.2 -6.5 percent, inflation rate at a range of 6.0-7.2 percent, the rupiah exchange rate at Rp9,600 per US dollar and three month SPN at 5.0 percent.
These assumptions will be submitted to the House`s Budgetary Body for further deliberations.
Minister Chatib Basri has also predicted Indonesia will have an economic growth at the level of 6.4-6.9 percent in 2014.
"The government is optimistic that the target can be achieved considering the improvement in the world`s economy and the growth of Indonesia`s industry and trade sectors," said the minister during a meeting with members of the parliament on Tuesday.
The minister also mentioned about inflation rate which will be at the level of 3.5-5.5 percent next year. He said the government will boost food commodity`s production to control food price and implement policies in the energy sector.
"Low inflation rate, in long term, will boost Indonesia`s economy to be convergent with other countries` economy in the region. It will make our economy more competitive," said the minister.
Bank Indonesia (BI) has predicted that the national economy in the second quarter of 2013 will grow at a slower pace than projected earlier, and so will the economic growth this year.
The domestic economy expanded 6.02 percent in the first quarter of 2013, down from 6.11 percent a quarter earlier or lower than the central bank`s forecast of 6.2 percent.
The Bank of Indonesia has predicted that the economy in the second quarter of 2013 will grow at a slower pace than its forecast and will not be much different from the first-quarter growth.
Overall, the 2013 economic growth is expected to move to the lower percentage limit of 6.2-6.6 percent.
The current account deficit in the first quarter of 2013 was recorded at 2.4 percent of the gross domestic product, down from 3.5 percent a quarter earlier.
The shortfall in the current account deficit was the result of improving balance of trade fueled by a drastic drop in the import of consumer goods, the central bank noted.
Meanwhile, capital and financial transactions in the first quarter of 2013 recorded a deficit, along with declining foreign investment inflows because of worsening global economic situation and high inflationary pressure.
(A014/H-YH/F001)
Editor: Jafar M Sidik
Copyright © ANTARA 2013
