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Langgam Pos - The new government under Prabowo Subianto-Gibran Rakabuming Raka is facing challenges regarding the State Revenue and Expenditure Budget (APBN) for 2025. One of the issues at hand is the economic growth overshadowed by the risk of slowdown.
Nevertheless, economic observer Piter Abdullah believes that Prabowo still has the capability to steer Indonesia's economic growth towards a brighter direction.
"We should all actually be equally optimistic because, when looking at the prerequisites for high growth, we have all those prerequisites," he said on Wednesday (24/7/2024).
According to Piter, utilizing Indonesia's wealth properly along with innovation is key. Therefore, Prabowo must have breakthroughs and the right strategies to boost this fantastic economy.
"Yes, we have the potential, yes, we can achieve 8% growth, but the question is 'how' do we realize this 8% growth? That is what we await the answer from President Prabowo," Piter remarked.
Prabowo, as per Piter, needs to be willing to evaluate and correct economic policies that have only led to around 5% growth.
"There needs to be an evaluation first, correction first concerning what has happened so far because if we have had the potential all along to grow significantly and haven't achieved it, it means there was something wrong in our economic policies all this time," he said.
Challenges Faced
Executive Director of the Center of Economic and Law Studies (CELIOS), Bhima Yudhistira, revealed 5 challenges that the new government needs to address regarding the State Revenue and Expenditure Budget (APBN) in the Prabowo-Gibran era.
The first challenge is the APBN deficit from projects during President Joko Widodo's term that need resolution.
"The widening of the APBN deficit due to the legacy projects from Jokowi's era that need to be resolved, injections of capital into state-owned enterprises, and operational expenses such as staff salaries and increasing material costs," Bhima explained.
The second challenge involves tax ratios. Bhima mentioned that tax ratios are at risk of decreasing due to pressures in the commodities sector, insufficient compliance from high-net-worth taxpayers, and the digital sector.
Furthermore, there is a challenge regarding debt maturing next year amounting to Rp. 800 trillion that the new government under Prabowo Subianto must pay off.
"This makes budget maneuvering for new programs like free lunches more difficult," he elaborated.
Economic Growth
The economic growth faces risks of slowdown due to export trading partners, including China, reducing demands.
"Investments are becoming more selective due to high interest rates and geopolitical risks," Bhima clarified.
"It is hoped that the Minister of Economy and Finance in the new government under Prabowo can be more rational and say 'no' to programs that consume excessive budgets," he added.
In a separate statement, Director of PT. Laba Forexindo Berjangka, Ibrahim Assuaibi, expressed that achieving Indonesia's economic growth target of 8% over 5 years during President-Elect Prabowo Subianto's leadership will be challenging if structural economic issues are not addressed.
"Because of these problems, during Joko Widodo's two terms in office, Indonesia's economic growth stagnated around 5%. Jokowi's target during his campaign for the 2014 Presidential Election was also never achieved, which was to make Indonesia's economy grow by 7%," Ibrahim stated.
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