The Jakarta Globe – Jakarta. Friday’s massive protests against Jakarta’s Governor Basuki “Ahok” Tjahaja Purnama has had virtually no effect on Indonesia’s economy, an executive of the central bank said on Saturday (05/11).
Solikin M. Juhro, Bank Indonesia director for monetary policy, told reporters the protests, which had run peacefully during the day but turned to rioting later that night, is only a temporary problem to which the government has already responded.
“The government’s positive attitude toward the incident surely made business players see our economy has a lot of potentials to attract investment,” Solikin said.
He cited a statement made by the International Monetary Fund earlier this year which said Indonesia has successfully navigated the economy through global headwinds.
“It’s a strong statement, almost like praise, because we are deemed to be able to make consistent policy, to have prudent fiscal [policy] and timely structural reform,” he said.
According to Solikin, a rebound in investment is one influence in the country surpassing its growth target in the state budget next year.
“People will love to invest here due to the stability, which should not be taken for granted. We need to keep [the stability],” he said.
The government and lawmakers agreed to set a 5.1 percent gross domestic product growth target in the 2017 state budget, lower than this year’s 5.2 percent target on the back of global economic uncertainty.
Bank Indonesia expects the economy to grow around 4.9 percent to 5.3 percent this year.
The World Bank’s estimation for Indonesia’s economy next year is slightly more optimistic with 5.3 percent growth next year, a steady growth from 4.8 percent growth last year, 5.1 percent expected growth this year and 5.5 percent estimation in 2018.