REPUBLIKA.CO.ID, JAKARTA - The current global economy must be ready with the absence of further quantitative easing. Emerging market countries, such as Indonesia have problems with their budget and current account deficit.
Minister of Finance, M Chatib Basri said that there were two solutions to handle this condition; external and internal solutions. Since Indonesia cannot do anything externally, from internal point of view, government and Bank Indonesia (BI) would focus to hold current account deficit to 1.69 percent through the increase of production capacity and demand.
"In the end of fourth quarter 2013, current account deficit is estimated only seven billion USD, while in the end of the year, the total is estimated 31 to 32 billion USD," Basri said recently.
The former Chairman of Investment Coordinating Board (BKPM) predicted that current account deficit would be improved in 2014 as part of series of government policy packages that were launched in August 2013. The first package was to increase biofuel capacity up to 10 percent domestically. Secondly, to increase of import tax from 2.5 percent to 7.5 percent, also to rise of luxury sales tax up to 150 percent.
Third package was to give incentive for labor based companies to avoid job layoffs. These companies would be granted tax gradual payment from 25 to 50 percent.
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