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View all search resultsThe target for year-on-year GDP growth of 5.5 to 6 percent in the first quarter remains in place, Finance Minister Purbaya Yudhi Sadewa announced on Wednesday.
he government has doubled down on its projection for exceptionally strong gross domestic product growth in the first quarter despite limited room for fiscal support as the United States-Israeli war on Iran poses global economic challenges.
Finance Minister Purbaya Yudhi Sadewa said in a state budget press conference on Wednesday that the GDP growth target of 5.5 to 6 percent year-on-year (yoy) in the current quarter “may still be achievable”.
The strategy proposed by the minister for reaching the target was to expedite government spending, which is typically slow at the start of the year, only to surge in the third and fourth quarters.
A case in point was last year’s first quarter, when government spending fell behind schedule due to a major budget overhaul, resulting in meager GDP growth of 4.87 percent yoy, well below the typical 5 percent.
Purbaya said the fiscal approach now was to spread state spending evenly throughout the year, hence his optimism about the first quarter performance.
State spending was relatively strong in the year’s first two months at Rp 494 trillion (US$29.2 billion), which is 42 percent more than in the same period last year and represents 13 percent of the Rp 3.8 quadrillion earmarked for the full year.
Speaking at the same press conference, the ministry’s economic and fiscal strategy director general, Febrio Kacaribu, said the approach of spreading spending more evenly marked “a shift” from what the ministry had done in past years.
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