World Bank: Rupiah Depreciation Not Due to Erroneous in Economic Management

World Bank: Rupiah Depreciation Not Due to Erroneous in Economic Management

Depreciation of the rupiah against the US dollar is not due to incorrect in the Indonesian economic management, but because of the strengthening US dollar globally, “Diop said at the launch of the quarterly report of the Indonesian economy, in Jakarta, Wednesday (18/3) morning.

Bank Indonesia middle rate notes, the rupiah continued to strengthen since Monday (16/3), from USD 13 237 to Rp 13 209 (Tuesday, 3/17), and Rp 13 164 (Wednesday, 3/18).

Diop reminded, that the US dollar until now has not returned to the first position, so there is still potential to continue to strengthen.

Fiscal Space

Related with the weakening of the rupiah, Chief Economist of the World Bank in Indonesia, Ndiame Diop appreciates to Indonesian government steps, which has revised the State Budget (Budget), in which the removal of subsidies the price of fuel oil (BBM).

According to Diop, with steps (revised state budget) that the current capital expenditure in excess of the budget allocated for energy subsidies. However, he cautioned that the space available to spending is limited.

“It would be difficult to achieve as much as 2 times of the capital expenditure from 2014, due to the disbursement barriers and limited fiscal space,” Diop said.

Chief Economist of the World Bank in Indonesia was estimated, would not enable a major increase in the economic growth in Indonesia. Quoting a World Bank report, Diop, estimated Indonesia’s economic growth in 2015 will reach 5.2 percent, and will rise in 2016 to 5.6 percent. The budget deficit figure is expected to reach 3.0 per cent (2015), and 3.2 percent (2016).

“For the short term, the Indonesian economy grew 5.5 percent or higher, it will be hard for the current conditions,” Diop said.  (ES)