KEEPING ECONOMY IN THE POLITICAL YEAR

As the fourth year of the implementation of the Working Cabinet development program to achieve development goals in order to achieve prosperity and social justice, the government responded in 2018 through the establishment of the theme of fiscal policy, namely strengthening fiscal management to accelerate equitable growth.

For this reason, there are three fiscal strategies prepared this year, namely optimizing state revenues while maintaining an investment climate, efficiency in spending and increasing productive spending to support priority programs, and encourage efficient, innovative and sustainable financing.

Later, Minister of Finance Sri Mulyani Indrawati revised the economic growth projection to only 5.14% - 5.21%. Not because the political year is referred to as the 2018 economic ghost and even until 2019.

It was proven that simultaneous regional elections on June 27 in 17 provinces and 153 cities / regencies did not make the political situation heated up to disrupt economic growth.

Even the Central Statistics Agency noted that Indonesia's economy in the second quarter of 2018 grew 5.27%, higher than the 5.01% growth in the same quarter of last year. The achievement is the highest quarterly growth since the administration of President Joko Widodo. The highest quarterly growth occurred in the second quarter of 2016, which was 5.21%.

So what makes the government revise the rate of economic growth? Do investors in the country refrain from expanding due to wait and see ahead of the 2019 elections?

Even the Central Statistics Agency noted that Indonesia's economy in the second quarter of 2018 grew 5.27%, higher than the 5.01% growth in the same quarter of last year. The achievement is the highest quarterly growth since the administration of President Joko Widodo. The highest quarterly growth occurred in the second quarter of 2016, which was 5.21%.

So what makes the government revise the rate of economic growth? Do investors in the country refrain from expanding due to wait and see ahead of the 2019 elections?

Then, in 2014, economic growth slowed to 5.02%, from 5.58% a year earlier, but still far better than 2015 which only grew 4.79% due to the weakening trend in commodity prices.

That is, the political year has never had a large correlation with economic growth trends. It is the external factors that are more hoisting or suppressing the Indonesian economy.

At present, the sentiment of trade war between the United States and China and the normalization of the Federal Reserve's monetary policy are the cause of the global economy being cold-hot because it triggers uncertainty in the global economic recovery.

In the end, Indonesia was also affected so that the pace of economic growth must be corrected. The International Monetary Fund also cut Indonesia's economic projections, from 5.3% to 5.1%.

The depreciation of the rupiah against the US dollar, which has now reached Rp. 15,237 per US dollar clearly has an impact on net exports which is one of the main components forming the Gross Domestic Product (GDP).

Many raw materials are still relying on imports, while export performance has not been relied on because of the world trade that is in full swing due to the trade war.

For this reason, the Daily again reminded the government to start maximizing household consumption. It is not a taboo to intensify populist policies to hoist household consumption which can lead to increased economic growth.

The reason is that the intensity of the trade war will not decrease until next year so that the strengthening of the domestic market, by increasing demand from the domestic market can clearly be an alternative.

Of course the problems that cause our export commodities to be less competitive still need to be addressed so that when the global economy recovers, export performance can be better quality.