Indonesia presents 2016 budget plan, sees GDP growth of 5.5%

[JAKARTA] Indonesian President Joko Widodo unveiled on Friday a proposed 2016 budget built on the assumptions that the country's slack economic growth will accelerate next year and the rupiah will be stronger.

The proposed budget assumes 2016 economic growth at 5.5 per cent. That is below 5.7 per cent assumed in the revised 2015 budget, but still optimistic compared to the latest government outlook for this year of 5.0-5.2 per cent.

Indonesia grew about 4.7 per cent in each of the first two quarters, and many economists say growth this year will be below 5 per cent. "Infrastructure construction will push investment growth and help national consumption," Jokowi said, adding that exports should improve due a better global economic outlook.

The budget proposal also sees an average rupiah exchange rate at 13,400 per dollar, much weaker than the 12,500 assumption made for 2015. The rupiah on Friday was trading at 13,777 against the greenback.

REUTERS