The growth in domestic consumption will help the positive growth of Indonesia economy in general and will encourage the business of inter-island transportation and domestic logistics, according to some sources.
Deputy Macro Economy and Finance at the Coordinating Ministry of Economic Affairs Iskandar Simorangkir underlined that though the Indonesia international trade will still face deficit this year in which import would still be higher than export, but the economy would grow positive, thanks to the high contribution of domestic consumption.
“The government is optimistic that Indonesia’s economy will remain strong, stronger than other countries, though the IMF (International Monetary Fund) has corrected its global economic growth projections,” Iskandar said as quoted by antara.co.id.
“Domestic consumption sector reaching 56 to 57 percent of Indonesia’s economic growth,” he said, adding that the consumption sector is a mainstay of Indonesia to encourage economic growth to survive to around five percent.
In addition to the high consumption, the high entry of investment into Indonesia worth Rp800 trillion after the approval of the tax facility and tax holiday would help the national economy growth and the domestic business, said Iskandar.
As the report says, IMF has just revised the global economic growth projection that referred to the slowing world exports.
In its latest report, IMF revised projection on world economic growth. In a publication titled ‘Tentative Stabilization, Sluggish Recovery’, The IMF projected that global economic growth in 2019 would reach 2.9 percent, down 0.1 from the previous projection of three percent.
In 2020, global economic growth is projected to reach 3.3 percent or down 0.1 percent from the previous projection and in 2021 it will be cut 0.2 percent from 3.6 percent to 3.4 percent.
“From our study of 120 countries, 76 percent of exports are negative. So which countries can survive? Countries that have large domestic demand,” said Iskandar.
Indonesia’s economic growth in 2019 would reach 5.04 to 5.08 percent, he projected. RI’s economic growth is under China in the ranks of 20 world economies or G20, he continued.
Some contacted sources doing business in domestic logistics and transportation appreciated with the Indonesia positive economy growth saying the high domestic consumption would help their domestic business survival and their future business growth.
“Logistics and transportation business totally hang on production and consumption. Whenever the production and consumption increase, our business will be more promising,” a source told Indonesia Shipping Gazette.
But he is still optimistic with the Indonesia’s international trade market. “As far as export and import increase, our business will grow up, even within the condition of trade deficit,” he explained.