Indonesia's Economy Strong against US: Minister Sri Mulyani

TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati said that Indonesia's economy is strong enough to stand against negative sentiments triggered by the Federal Reserves plan to increase its fund rate.

"Indonesia's economic foundation is quite solid, so that Indonesia stood out among other countries," Sri Mulyani stand said when speaking at the Indonesia Economic Outlook held by the Functional Group (Golkar) Party in Jakarta on Thursday, December 15, 2016.

As a developing country with strong domestic market and a considerably high growth, Sri Mulyani explained that Indonesia has an economy supported by fiscal policies, such as the issuance of US$3.5 billion worth of government bonds in early 2016 that resulted in higher yield compared to last year.

In addition, the government predicted that the 2016 State Budget would be closed with a deficit of 2.5 to 2.7 percent, an economic growth of five percent, an increase in foreign exchange reserves, and a maintained current trade balance and capital account.

Sri Mulyani added that market movers would remain optimistic over the country's economy next year as reflected by an increase in infrastructure spending, better-targeted subsidies, an increase in spending on human resources improvement, and poverty alleviation efforts.

"Government investments are aimed to maintain demands. Therefore, we have the credibility, and positive sentiments can be maintained," Sri Mulyani said.

Earlier, the Fed decided to raise its Fed Fund Rate by 25 basis points from 0.25 percent to 0.5 percent, due to economic expansion, labor market reinforcement and inflation. The fed predicted that the US economy would grow by 2.1 percent in 2017 when compared to this year's growth at 1.9 percent.

ANTARA