"If the United States increases its interest rate, Indonesia`s economy will grow around 5.5 percent, but if the hike is not significant, it will only be close to six percent," Finance Minister Chatib Basr said.
Jakarta (ANTARA News) - Global economic conditions, which are expected to recover, will determine Indonesias economic growth, which has been set at 5.5-6.0 percent for 2015, Finance Minister Chatib Basri said here on Tuesday.

"Global growth in 2015 will be better than in 2014," he said when met at the parliament building.

He noted that global economy will improve next year as the United States will likely start increasing its interest rate, followed by economic recovery in Europe and Japan.

"If the United States increases its interest rate, Indonesias economy will grow around 5.5 percent, but if the hike is not significant, it will only be close to six percent," he said.

Chatib explained that improving global economy will increase demand, so the export performance will improve to contribute to national economic growth.

"European and Japans economy will slightly be better. So, exports will increase as the small rise in the price of commodities will increase global demand," he said.

With regard to domestic economy, he said its growth will be driven by improving household consumption and government expenditure as inflation is maintained, while an adequate fiscal room is available in the 2015 budget for expenditures.

"The government will have a fiscal room so that the budget will not be cut again, which means that the governments expenditure will increase and if inflation could be maintained consumption will also increase," he said.

The parliaments budget committee and the government have agreed with the macroeconomic assumptions set in the 2015 draft budget, including assumptions for economic growth at 5.5-6.0 percent, inflation at 3.5-5.0 percent, and rupiah exchange rate against the US dollar at Rp11,500-Rp12,100.

The assumptions for the rate of interest for three-month state securities meanwhile have been set at 6.0-6.5 percent, oil lifting at 800,000-900,000 barrels per day, and gas lifting at 1,200,000-1,260,000 barrels oil equivalent per day.

The assumptions will be used as the basis for the discussion of the 2015 budget bill and will be presented by President Susilo Bambang Yudhoyono at the state address to mark the countrys independence anniversary in August.(*)

Editor: Heru Purwanto
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