JAKARTA • Indonesia will seek to sustain the growth in domestic consumption and boost government spending in a bid to shield itself from a spillover of slowing economic growth in China, according to Finance Minister Sri Mulyani Indrawati.
The success in maintaining people’s purchasing power and consumption, which accounts for more than 55% of Indonesia’s GDP, will determine if the country can withstand weak external situation, Indrawati told reporters in Jakarta yesterday.
As China is likely to guard its domestic demand, Indonesia’s goods and services exports will not be hurt by the slowdown in Asia’s largest economy that will be caused by weak exports, she said.
President Joko Widodo, who’s bidding for a second term in an April election, is struggling to bolster economic growth as the trillion dollar economy is saddled with a record trade deficit and weakening commodity prices.
While the rupiah has rebounded from a twodecade low last year, prospects of a wide currentaccount deficit for a second straight year continues to weighs on investors.
With a low budget deficit and a diversified financing, the government is expected to boost investment and exports, Indrawati said.
Authorities will use all available instruments, including fiscal and monetary, to curb current-account deficit, she said. The Finance Ministry foresees no difficulty in budget financing and is monitoring market situat ion, Indrawati said.