JAKARTA: Indonesian Finance Minister Sri Mulyani Indrawati said on Tuesday that economic growth this year could top the current official target, thanks to better trade numbers and investment than in 2016.
Indrawati said growth of 5.3 percent is possible, and the government plans to revise the 2017 state budget to change the current target of 5.1 percent.
Still, the minister said she would continue using a range of 5.1-5.3 percent for the growth outlook.
“Exports and imports are better than in 2016, we expect positive changes and also slightly better investment,” Indrawati told a press briefing. “We assume consumption to be stable despite slightly higher inflation rate compared to last year.”
The government wants to revise the 2017 budget not only to reflect a higher growth forecast but higher oil prices – which Indrawati said might average $50 a barrel this year, above the current assumption of $45.
The changes would mean more revenue from the oil sector, but also result in bigger subsidy bills for electricity and LPG.
Still, she said she expects a net revenue increase of 15 trillion rupiah ($1.13 billion). At the same time, Indrawati said total tax revenue may not grow as much as the government initially anticipated.
The approved budget assumes a 16 percent rise in tax revenue, and she said now the increase is likely to be 13 percent.
The government will also redirect around 16 trillion rupiah of planned spending, Indrawati said, without giving details of proposed changes.
The proposed budget revisions will be submitted to parliament in June, she said.
