Asian Development Bank (ADB) revises Indonesia economic growth in 2016 from 5.2% to 5%. It is also revised from 5.5% to 5.1% in 2017. The drop is affected by the investment spending which is lower than expected.
According to Sona Shrestha, Deputy Chief Representative of ADB in Indonesia said that government spending for infrastructure will be accelerated on the second semester 2016. But overall, investment and government consumption will be lower due to the low revenue. ADB said that the policy makers in Indonesia need to consider how they face the decrease in prospect growth due to the budget cut and delays in infrastructure projects.
By 31 August, tax revenue realized is only IDR 622.67 trillion or 47% from target stated in Revised National Plan of IDR 1.318,9 trillion. On the expenditure side, the government also cut IDR 137.6 trillion. According to Sri Mulyani, the Minister of Finance, the cutting does not include infrastructure spending, social assistance, staff allowances, and other expenditures that have been contracted. (*)
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