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2014 election hoped to boost Indonesian economy

Publication Date : 25-03-2014

 

Indonesian Finance Minister Chatib Basri says he is optimistic that the upcoming election will contribute to Indonesia’s economic growth in 2014, which is expected to reach 5.8 per cent to 6 per cent.

“Contributions from the election will likely be good enough because ad spending will certainly increase. With such an increase in spending, demand will increase as well,” he said in Jakarta on Monday, as quoted by Antara news agency.

Chatib said household consumption would still account for the biggest portion of spending in the national economy, while the 2014 election would contribute around 0.2 per cent to economic growth.

The minister further said he was not worried about the World Bank’s (WB) latest projections, which revised the forecast for Indonesian economic growth this year to a range of 5.5 per cent to 5.9 per cent from between 5.8 per cent and 6.2 per cent, due to the election’s limited influence.

“We are projected to still grow by 5.8 per cent to 6 per cent while Bank Indonesia’s projection is between 5.5 per cent and 5.9 per cent. So, the government’s figure is still in line (with the WB forecast),” said Chatib.

Earlier, Asian Development Bank (ADB) economist Edimon Ginting said the upcoming election would boost performance in the services sector, which would eventually lead to increases in the consumption sector.

“The election will certainly boost the hotel and restaurant sectors and increase spending in the garment sector,” he said.

Edimon predicted that this year’s economic growth would be supported by performance in the investment and export sectors that would strengthen again, after suffering a decline due to weak global demand.

“With the election and a new government, investment will increase and we are more optimistic. The election gives contributions and positive impacts but the main sources of the growth are still in investment and export,” he said.

 

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