Jumat, 01 Maret 2019

My fears


Finance Minister Sri Mulyani sees a "high risk" of GDP growth undershooting the 5.3% target this year.
 "We see the economy growing 5.3% this year, but downside risks are high. Do not think 2019 will be easier than last year," she said at the Indonesian Chamber of Commerce and Industry forum.
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Actually the likely situation occured in 2018 when the economic growth realization was ended at 5.17%, lower than the government target of 5.4%. The global pressure such as the US Federal Reserve's monetary policy that may fall this year, the trade spat between China and the US, a fall in commodity prices, and likely low investment growth may put the domestic economy under pressure.
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Global pressure may hits the import duty revenue, since it would influence the lower growth of international trade. Currency rate would become potential problem to the import volume, as the Fed issues it’s monetary policy. Anticipating the pressures,  Bank Indonesia has hiked its key rate by 175 bps to 6.00%.
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The export duty realization would face the situation identically. A fall in commodity prices and production may curb export growth. Investment even may not grow 7% due to high interest rates. Hopefully, the impact not hitting the economy for the 2019, since it could affect the puchasing power and potentially dragging the excise revenue down.
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Government has drafted the macro-assumptions to lead the national economy. The assumptions consist of inflation at 3.5%, average exchange rate at 15,000/$1, average crude oil price at $70 per barrel, crude oil output at 775,000 barrel per day, gas output at 1.25 mln barrels of oil equivalent per day, and yield on the three-month Treasury. Government should be able to manage the global pressure impacts and struggle in keeping the macro-assumptions set, or it ruin not only DJBC’s revenue but economy as well.
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#heavenknows.

#internationaltrade
#nationalmacroeconomy

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