2017 INDONESIA ECONOMIC PERFORMANCE AND 2018 OUTLOOK. Slide # 3

Transcription

1 2017 INDONESIA ECONOMIC PERFORMANCE AND 2018 OUTLOOK Slide # 3

2 INDONESIA ECONOMIC PERFOMANCE IN Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Indonesia successfully maintaining the growth momentum in YoY: 4, YoY: 5, YoY: 5,07 for a decade, Indonesia performs better than many other emerging economies G20 & BRICS Q4 (0,6) China India Indonesia S. Arabia Turkey Korea Australia Argentina Mexico S. Africa Brazil Russia Canada US Germany UK France Japan -I0taḷy6 Italy

3 INDONESIA ECONOMIC OUTLOOK IN 2018 economic growth projected to rise higher in 2018, supported by the continuity of growth momentum across all sectors World Advanced economies Emerging market and developing economies Indonesia p 2018p 2018 macroeconomic indicators 2 0 GDP Growth (%) 5,4 Exc. Rate (IDR/USD) Oil Price US$/ barrel 4,8 Gas Lifting (thousand BOPD) Inflation (%) YoY 3,5 Int. Rate (%) 5,4 Oil Lifting (thousand BOPD)

4 FUTURE GLOBAL CHALLENGES Slide # 6

5 FUTURE GLOBAL CHALLENGES Geopolitics & Security Water Conflicts Climate Change Population Ageing Food and Energy Security

6 FUTURE GLOBAL ECEONOMIC TRENDS Populism in EU (Brexit,Eurosceptics) Protectionism in USA (Inward Looking Policies) Rise of Asia as an Economic Powerhouse Green Economy Rise of Millenials Rise of the machines

7 PAY AN ATTENTION TO THE TECHNOLOGY CHANGE... It will radically transforms our daily life DISRUPTION (JOB DISPLACEMENT) ARTIFICIAL INTELLIGENCE INTERNET OF (EVERY)THINGS INDUSTRIAL REVOLUTION 4.0 9

8 SUSTAINABLE ECONOMIC TOWARDS SUSTAINABLE ECONOMIC GROWTH Slide #10

9 NOW WE ARE LIVING IN THE AGE OF KNOWLEDGE DRIVEN ECONOMY (KDE) strengthening KDE is an imperative to sustain high growth rates in the future and to avoid middle income trap Old Industrial Economy Resource based Labour Intensive Mass Production Proximity is important Require Control Top Down Approach Rigid Knowledge Driven Economy Knowledge Intensive High Skill Talent Mass Colaboration Location less significant Require Collaboration Horisontal Collaboration Flexible Slide #11

10 HUMAN CAPITAL INVESTMENT IS A KEY Indonesia still needs to continuously and consistently improving its human capital Indonesia s HDI Comparison of HDI Indonesia s HDI ,72 Expected years Of Schooling 70,9 Life Expectancy At Birth * In thousand 7,95 Mean Years Of Schooling * GNI per Capita Singapore Brunei Drslm Malaysia Turkey Mexico Brazil Thailand China Indonesia Viet Nam Philippines SouthAfrica India Cambodia Myanmar

11 TO SUCCESSFULY COMPETE IN KNOWLEDGE DRIVEN ECONOMY Greater Emphasis Should Be Put On Science,Technology,Mathematics (STEM) subjects in Education Singapore Japan Chinese Taipei Vietnam Hong Kong (China) B-S-J-G(China) Korea United Kingdom Source : OECD United States OECD average Turkey Thailand Mexico Indonesia Brazil Science Reading Mathematics Indonesia in PISA Score The performance of Indonesian students (girls and boys) in science, mathematics and reading is one of the lowest among PISAparticipating countries with an average ranking of 62 out of 69 countries

12 STRUCTURAL REFORMS IS CRITICAL FOR INDONESIA TO MAINTAIN HIGH SUSTAINABLE GROWTH IN KDE ERA The key is to focus on three sets of reforms INSTITUTIONAL REFORM REGULATORY REFORM FISCAL REFORM Creating Institutions That Apply Good Governance and adaptive to change Designs Regulations That Foster Innovation, Competition and Growth More Effective And Efficient Management of Fiscal Policies

13 INDONESIAN GOVERNMENT VERY COMMITED TO CREATE STABLE AND GOOD INVESTMENT CLIMATE While Ease Of Doing Bussiness (EODB) Score Consistently Improve, More Efforts Needs To Be Done Innovation Institutions Infrastructure Some Government Efforts To Improve Investment Climate Business Sophistication Macroeconomic Environmen 1. Easing Import and Export Market Size Technological Readiness Health and Primary Higher Education and Training Restrictions 2. Reducing Dwelling Time 3. Revising and Perfecting Tax Financial Market Development Labour Market Efficiency Goods Market Efficiency Incentive Schemes (Tax Allowance and Tax Holiday)

14 INDONESIAN GOVERNMENT IS VERY COMMITTED TO IMPLEMENT STRUCTURAL REFORMS Some of Internationally Recognised Achievements In Implementing it Ease of Doing Business 2018 Indonesia position improve from 91 to 72. Indonesia also recognised as one of the Top Improvers. Currently Indonesia position is above India, Brazil, dan Philippines Investment Grade dari Standard and Poor s Indonesia gains investment grade from all reputable international rattings agency: S&P, Moody s, Fitch, JCRA, &R&I. 19 positions 5 positions BBB #1 Galup World Poll Indonesia & Swiss are considered as the countries with highest level of trust to the Government Global Competitiveness Index Indonesia position improve from 91 to of 12 pillars of measurement is getting better score such as: Institution, Infrastructure, macroeconomic, health and primary education, technological readiness, business sophistication

15 TAX REFORMS AS PARTS OF FISCAL REFORMS Slide #17

16 CHALLENGES OF INDONESIA S TAXATION tax revenue consistently increases every year, but tax ratio is still low Ta x Revenue % of GDP 14% 11% 7% % Even Among ASEAN Peers % RRC Indonesia USA Germany Canada Malaysia Thailand Australia France UK

17 GOVERNMENTS PRIORITIES SPENDING IN 2018 Slide #22

18 INSTRUMENTS STATE BUDGET AS FISCAL Allocation Distribution Stabilisation

19 Foreign Exchange Reserves As of January 2018 amounted US$ 131,98 billion, has increased since last year and recorded the highest.

20 GOVERNMENT BUDGET 2018 AT A GLANCE 1,2 GRANT TRILLION RUPIAH Non Tax Revenue 275,4 Tax Revenue 1.618,1 REVENUE BUDGET 2018 SPENDING 1.894, ,7 CENTRAL GOVT SPENDING 1.454,5 TRANSFER FUND DEFICIT 2,19% of GDP 325,9 FINANCING 766,2

21 PRODUCTIVE SPENDING CONTINUES Infrastructure Development, Reducing Inequality and Improving Human Capital Are The Government Focus, While Energy Subsidies Decrease Significantly Productive Spending & Energy Subsidies ( ) Education Infrastructure Health Energy Subsidies

22 SOCIAL SPENDINGS TO REDUCE POVERTY AND INEQUALITY Poverty Alleviation and Supports Towards Poor Segments Of The Society Continously Being Strengthened Through Well Designed Social Programs and Targeted Subsidies 2018 Allocation: 283,7* *Trillion Rupiah* TARGETS 2018 PKH FOOD SUPPORT IND.SMART PROGRAM JKN FOR POORS SUBSIDIES FOR SMALL BUSSINESS VILLAGE FUND 10 million houshold 15,6 million houshold 19,7 million Student 92,4 million People 117,7 thousand HouseHold Villages

23 SPENDING FOR HUMAN CAPITAL DEVELOPMENT 20% BUDGET % 444,1 % 5% BUDGET 419, ,1 65,9 370,4 353,4 59, ,3 10,4 (5,1) 13,3 5,8 29,6 10,3 40,1 13,7 5,8 IND.SMART PROGRAM SCHOOL OPERATIONAL FUND 19,7 Mil. Student 56 Mil. Student IND.HEALTHY PROGRAM 92,4 Mil. People BIDIK MISI SCHOLARSHIPS SCHOOL REHABILITATION 401,5 Thousand Student 61,2 Thousand FAMILY PLANNING FACILITY HEALTH FACILITY DEV. 1,8 Mil. People 49 Hospital/ Health Facility TEACHER ALLOWANCE 1.8 Mil. Teacher BABY IMMUNISATION PROGRAM FOOD & DRUG CERTIFICATION 92,5% 74 Thousand

24 INFRASTRUCTURE DEVELOPMENT REMAINS FOCAL FOCUS OF THE GOVERNMENT SOME GOVT PRIORITIES FOR 2018 Road Building Targeted: 865 km Irigation Development Targeted: 781 km Electrification Ratio Targeted: 95,15 % % Development of Subsidised Apartments Targeted: unit

25 WHILE INFRASTRUCTURE BUDGET HAS BEEN INCREASE SIGNIFICANTLY FOR THE PAST FEWYEARS... Not All Infrastructure Development Can Be Financed By The Governement Budget, Therefore Private Sector Participation Through PPP is Encouraged. Infrastructure Inde Vietnam Indonesia Philippines China Malaysia x India Thailand Infrastructure Gap Brazil Rusia , , , , , GDP Per Capita Governement Facilitates Investors Who Eager To Participate In Indonesia Infrastructure Development PT Sarana Multi Infrastruktur Specialised in Infrastructure Financing with 3 main Focus: Financing and Investment, Consultation, and Project Development P T P e n j a mi n a n I n f r a s t r u ktu r Indonesia Specialised in Infrastructure Guarantee To Increase Credit Worthiness from Infrastructure Projects Either With PPP or Without PPP

26 CONCLUSIONS Slide #30

27 CONCLUSIONS Indonesian Economy in 2018 Will Continue To Experience Robust, Stable, and Increasing Growth, Supported By Recovery Momentums Gained During Previous Years Indonesian Government Commited to Continue Structural Reforms (Institutional Reform, Regulatory Reform, and Fiscal Reforms) to achieve High and Sustainable Growth In The Era Of Knowledge Driven Economy Indonesian Governement Will Continuously and Consistently Improve its Investment Climate In Order To Create A Good And Stable Environment For Bussiness To Thrive and Prosper Indonesian Government Welcoming Any Constructive Suggestions and Advices From The Private Sectors Regarding its Efforts To Create A Good Investment Climate Indonesian Government Strongly Encouraged And Will Facilitates Private Sectors To Take A Part In The Infrastructure Development In Indonesia Indonesia Offers A Promising Future For Business, Dont Wait To Long!!!, Invest In Indonesia As Soon As Possible

28 10 MINISTRIES AND GOVERNMENT INSTITUTIONS WITH THE LARGEST BUDGET IN 2018 Ministries 107,7 107,4 62,2,7 59,1 48,2 41,3 40,1 32,9 45,7 23,8 114,2 102,7 60,9 54,2 17,2 36,9 37,8 27,8 40,3 23,7 APBN 2018 OUTLOOK 2017 Government Institutions 96,3 12,5 8,3 6,4 5,7 5,6 5,6 5,5 4,8,7 2,8 95,5 3,3 8,2 5,2 3,8 9,8 1,9 2,2 4,0 2,7

29 Country Budget 2018: Ministry of Defence is still on the top priority, although a bit decreasing compared to last year. The budget is aimed to improve defence system. Unit helicopter attack AH-64E Apache from USA and Tank Leopard from Germany will be about to arrive. This year budget Ministry of Defence: Rp 107,7 triliun, lower than previous year- Rp 114,2 triliun. In general, Country budget is increasing 10,2% to Rp 847,4 triliun from outlook Second budget priority goes to Ministry of Public Works and Public Housings Rp 107,4 triliun. This has been increased to 4,6% or Rp 4,7 triliun from the previous year.

30 Among the ASEAN Countries, Singapore is top country with the biggest Defence budget. Data Stockholm International Peace Research Institute (SIPRI)

31 THANK YOU PRESENTED BY: RETNO SUPENI, M.Phil MINISTER COUNSELLOR OF ECONOMIC AFFAIRS EMBASSY OF INDONESIA - TOKYO ASEAN JAPAN CENTRE, TOKYO 13 FEBRUARY 2018