Govt to maintain domestic consumption as main pillar for growth

"We have to keep on maintaining the momentum of economic growth through domestic consumption. Domestic consumption will remain as fuel for national economic growth," Hatta Rajasa said.
Jakarta (ANTARA News) - The government will continue to maintain domestic consumption as a main pillar for the country`s economic growth, Chief Economic Minister Hatta Rajasa said.

"We have to keep on maintaining the momentum of economic growth through domestic consumption. Domestic consumption will remain as fuel for national economic growth," Hatta Rajasa said during a post-fasting gathering here on Tuesday.

Minister Hatta explained that he and the finance minister had discussed annual increase of labor wages adjusted to the inflation rate.

"The increase of labor wages recently has been adjusted to tax cuts. All this is an effort to increase the people`s purchasing power," the coordinating minister for economic affairs said.

The government will assess policies which are related to sectors on consumption that would boost economic growth such as the property sector.

"So, the consumption sector which generates economic growth must continue to be maintained so that it would not stop. There are a number of polices which are related to price increases of late, like that on housing. So, we are studying a policy on cheap housing," Hatta noted.

On the occasion, the minister admitted that the government still had to work hard to reduce the country`s current transaction deficit which had happened as a result of falling commodity prices.

"We are working hard to cut the deficit which is caused by the falling world commodity prices. This will of course cause a decline in the consumption sector," he said.

He said that one of the way to solve the problem was seeking more overseas markets or expanding the domestic ones.

Therefore, he hoped that domestic markets which also served people of the middle income bracket would not be filled in with imported goods.

"This is not that we are against imports. We accept the open market system. But we must be smart in taking advantage of domestic market as a country whose middle class people are on the rise," Hatta said.(*)

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