Indonesia’s Finance Minister Sri Mulyani Indrawati has set the country a target to keep growth at a minimum of 5% in 2009 and to keep unemployment flat. Indonesian President Susilo Bambang Yudhoyono had on 4 January 2009 earmarked Rp 50 trillion (US$4.9 billion) for a stimulus package to help the country survive the economic crisis.
The government had earlier forecast the economy would expand by 4.5 to 5.5 percent while others, including the World Bank, the International Monetary Fund and the Asia Development Bank projected figures of 5 percent or below.
The stimulus package comprises around Rp 38 trillion leftover from the government’s 2008 state budget, and Rp 12 trillion from the 2009 state budget. It will in part come in the form of tax reliefs, direct funding for certain business sectors worst hit by the crisis, additional financing schemes for infrastructure projects and net safety programs.
The government will ensure the stimulus be given only to industries that meet certain criteria, including industries that are mass employers or that produce primary goods or significantly contribute to exports.
Government spending and consumption is forecast to grow by 10.4 and .8 percent, respectively. Much of the effort will be to keep people in jobs. The Central Statistics Agency announced the “open” unemployment rate increased to 8.39 percent of the country’s total workforce of 111.95 million in August last year from 8.46 percent of the 111.48 million at work in February.
Indonesian shares surged 6 percent, helped by news of inflation in December remaining in the 11% bracket.
Source: Jakarta Post, 5 Jan 2009, “Stimulus to spur economy to 5%”, http://www.thejakartapost.com/news/2009/01/06/stimulus-spur-economy-5.ht...