Rabu 06 May 2015 22:47 WIB

Govt spending to jack up economic growth

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Foto: Antara/Fanny Octavianus
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REPUBLIKA.CO.ID, JAKARTA -- Finance Minister Bambang Brodjonegoro said he is optimistic government spending would contribute to economic growth in 2015.

The effect was not significant in the first quarter of 2015, but the growth would be higher in the whole of the year, Bambang said here on Wednesday (6/5).

"Certainly it would be better . The growth would be driven by the government investment with the spending," the minister said.

He said the government spending would be a big contributor to the economic growth especially after the procurement of goods and services has been completed in May for infrastructure projects.

The low economic growth of 4.71 percent in the first quarter of 2015 was up to expectation.

"The country's economic growth was expected to be less than 5 percent in the first three months of the year," he said, adding the growth rate was expected at 4.8 percent.

Earlier, head of the Central Bureau of Statistics (BPS) Suryamin said implementation of infrastructure pro0ject is expected to boost the economic growth in the following quarter.

He said the fund for the projects are expected to be disburse in May.

"Implementation of infrastructure projects would certainly has its impact on the economic growth and the gross fixed capital formation," he said.

Implementation of infrastructure projects would also contribute to development of various sectors especially transport sector, he said.

Improvement of infrastructure would facilitate goods transport and distribution, he added.

"Certainly the expectation is that infrastructure development would be carried out as scheduled. The government looks determined to start construction of infrastructure in in a number of areas," he said.

Meanwhile, Bank Indonesia predicted that stronger growth would be recorded for the economy in the second quarter of 2015 driven by the government's stimulus with its spending in big projects.

"The government spending is expected to increase starting in the second quarter of this year and the spending would continue to serve as a stimulus in the following quarters," Communications Executive Director of the central bank Tirta Segara said.

There are , however, risks that the growth would be below the target of 5.4-5.8 percent depending on the size of spending and acceleration of the spending by the government , household consumption and exports.

Exports are expected to grow though gradually, Tirta said.

The Central Bureau of Statistics has announced the country's economy grew only 4.71 percent in the first three months of the year or lower than 5.02 percent a year earlier.

The economic slowdown in the first quarter of this year was attributable to decline in consumption of non profit agencies, government consumption and investment in the building sector.

The decline in the government consumption was a result of delay in spending especially related to the revised state budget of 2015, which was approved only recently.

sumber : Antara
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