Posted on 27 Mar 2015
National Development Planning Agency (Bappenas) head Andrinof Chaniago has said that the government’s economic policy packages will impact the country’s economic structure in stages.
“We will feel their effects from year-to-year, one of which is toward achieving our deficit target by 2019,” he said as quoted by Antara in Jakarta on Thursday.
The minister said the deficit reduction could be achieved through efforts to boost exports so they could contribute more to state revenue. Therefore, he further said, one of the government's targets in the packages was to double investment to boost export-oriented manufacturing industries.
Andrinof said the government’s policy to prioritize the manufacturing sector was also aimed at preparing for declines in commodity prices and a slowdown in the country’s economic activities with its trade partners.
“We have continued to look for ways to boost the competitiveness of our industry and manpower as well as to increase non-oil and gas exports,” said Andrinof, adding that the government had also directed investment to help develop intermediary industry, which could produce basic and auxiliary goods to reduce government spending.
Andrinof went on to say that fiscal incentives, namely tax allowance and tax holiday, would be complimented by non-fiscal stimulus such as speeding up the development of supporting infrastructure, including power plants.
“This is why power plants are always a priority. This year we will start the 7,000-10,000 Megawatts [MW] power generation scheme,” he said.
The government recently introduced new regulations as well as revisions to older ones concerning tax incentives, visa exemptions, biofuel use, anti-dumping import duties and reinsurance operations for state-owned enterprises.
Finance Minister Bambang Brodjonegoro said earlier that the state budget deficit could be pushed down up by up to 1 percent of the gross domestic product (GDP) by 2019.
The government assumed a 1.9 percent or Rp 222.5 trillion (US$17.13 billion) budget deficit of the GDP in 2015.
