REPUBLIKA.CO.ID, JAKARTA -- Coordinating Minister for Economic Affairs Darmin Nasution has requested for an increase in government spending performance in the state budget to boost economic growth by 5.2 percent by the end of the year.
"The performance of state budget must be increased," Darmin said in Jakarta on Friday.
Darmin added that the growth in government consumption, supported by improved realization of this spending, could support investment and export performance, which contributed substantially to the economic growth in the first half of 2017.
In addition, he expected that there will be investment growth or gross fixed capital formation that is more optimal in the second half of 2017, or better than the achievement of the first half of 2017.
"Therefore, if you want a 5.2 percent growth, it would be good if investment growth is the same as the first semester," Darmin remarked.
Previously, the Central Bureau of Statistics (BPS) recorded economic growth in the first half of 2011 at 5.01 percent, supported by improved investment and export performance.
However, in Q2 of 2017, government consumption contracted and grew 1.93 percent negatively due to lower realization of personnel expenditure and goods expenditure over the same period of 2016.
Positive note is the realization of social assistance expenditure for social protection and poverty alleviation, which increased by 18.61 percent in this period.
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On a separate occasion, Finance Minister Sri Mulyani Indrawati projected that the economic growth in 2017 would amount to 5.17 percent, or slightly below the assumption in the 2017 revised state budget (APBNP) set at 5.2 percent.
He explained that the projection could be realized on condition that an investment performance, which in the first half of 2017 only grew 5.1 percent, would grow by 5.4 percent in the second half of 2017.
However, efforts to improve the performance of these investments could face obstacles in the form of banking credit growth that is still experiencing sluggishness until mid-2017.
"Banks still need to be cautious in boosting the growth of their credit because banks consolidate a lot to the credit performance that is experiencing pressure due to declining commodity prices," Sri Mulyani revealed in a working meeting with Commission XI of the House of Representatives (DPR).
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