RI Economy Anxious & Horrified, Minister Jokowi Urges to Do This News – 6 hours ago

Jakarta, CNBC Indonesia – The third quarter economic growth just released by the Central Statistics Agency (BPS) was below the government’s target, namely 5%. Minister of Finance Sri Mulyani said the government had prepared a number of programs ranging from housing incentives to social assistance so that this year’s growth target of above 5% was maintained.

“Regarding our economy in the third quarter, which was at 4.94%, this indicates that we need to respond with policies so that by the end of the fourth quarter, it can return to 5%,” said Sri Mulyani during a press conference at the Coordinating Ministry for the Economy, Jakarta, Monday (6 /11/2023).

He said the government was providing additional 10 kilograms of rice assistance until December 2023. The rice assistance was aimed at 21.3 million Beneficiary Groups in order to reduce fluctuations in rice prices in recent months.


“We have decided to provide additional funds for December,” he said.

Apart from that, Sri Mulyani said the government had also decided to provide direct cash assistance to 18.8 million poor families. This cash assistance is provided to reduce the impact of price fluctuations due to the phenomena of climate change and El Nino. The amount of funds prepared is IDR 400 thousand per family and will be given for November and December 2024.

“For BLT to 18.8 million KPM, the budget cost is IDR 7.52 trillion,” he said.

Sri Mulyani said the government would also accelerate the distribution of People’s Business Credit. He admitted that KUR distribution this year was somewhat hampered due to policy changes. Realization as of September only reached IDR 177 trillion from the target of IDR 297 trillion. Acceleration was carried out by asking the banking sector to be more active in distributing this credit.

Sri Mulyani said her ministry was also preparing a number of programs to maintain people’s purchasing power while encouraging economic growth. The first policy prepared is incentives in the housing sector.

Minister of Finance Sri Mulyani, Coordinating Minister for the Economy Airlangga Hartarto at the Third Quarter 2023 Economic Growth Press Conference and Fiscal Stimulus.  (RI Economics YouTube Screenshot)Photo: Minister of Finance Sri Mulyani, Coordinating Minister for the Economy Airlangga Hartarto at the Press Conference on Economic Growth for the Third Quarter of 2023 and Fiscal Stimulus. (RI Economics YouTube Screenshot)
Minister of Finance Sri Mulyani, Coordinating Minister for the Economy Airlangga Hartarto at the Third Quarter 2023 Economic Growth Press Conference and Fiscal Stimulus. (RI Economics YouTube Screenshot)

In the housing sector, he said the government would waive Value Added Tax (VAT) for house purchases worth IDR 2 billion. VAT borne by the government will also apply to houses worth IDR 5 billion, but the government only exempts VAT for IDR 2 billion from the price of the house.

“To stimulate the housing sector, namely from the demand side, the government is providing incentives in the form of VAT borne by the government,” he explained

He said the VAT borne by the government would apply from November 2023 to June 2024 at 100%. Meanwhile, in July-December 2024, only 50% of VAT will be borne by the government.

Sri Mulyani said that in the housing sector the government would also provide incentives in the form of waiving administrative fees for purchasing houses for Low Income Communities (MBR). The costs borne by the government are IDR 4 million. The price limit for this house has also been increased from IDR 160 million to IDR 350 million per house. This incentive will complement the MBR housing sector which already receives interest subsidies.

“So this is an addition to the incentives already given to low-income communities,” he said.

Sri said that in the housing sector, his party also provided additional budget for the Ministry of Social Affairs to run the integrated prosperous housing program. He said that each poor household would be given IDR 20 million to improve the condition of their house.

Sri said that with the policy package above, the government hopes to encourage the economy to grow to 0.2% in 2023. Thus, he targets economic growth in the fourth quarter to reach 5.01% and on an annual basis the economy can grow to 5.04% .

“If support is not provided, economic growth could fall to 4.99%,” he said.

Coordinating Minister for Economic Affairs Airlangga Hartarto said the government was preparing regulatory revisions to encourage exports to grow again. One of them is by relaxing the finance minister’s regulations regarding the export of manufactured products.

“Several policies implemented by the government include allowing the manufacturing sector, which usually exports 50% to the country, to be relaxed to allow more than 50%,” added Airlangga.

Airlangga said that to facilitate this relaxation, the government would revise a number of regulations. These include PMK and regulations under the Ministry of Industry.

“From the PMK it is possible, then from the minister of industry we have asked for the regulations to be revised so that this can further encourage exports,” he said.

[Gambas:Video CNBC]

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