BANDUNG-PKS Vice Chairman of the House of Representatives for the Economy and Finance Ecky Awal Mucharam assess a slowdown in the business world increasingly impact on the achievement of economic growth.
"The survey results on business activities were decreased to a serious challenge for the government. It became a serious signal that the economy is still save a lot of fundamental problems and it will not grow significantly. Economic growth target of 2016 targeted 5.2% which is difficult to achieve. Governments need to evaluate the effectiveness of existing policy packages and formulate groundbreaking more potent new economic policy, "said Ecky in a release received by jabarprov.go.id Tuesday (18/10).
As known, said Ecky Bank Indonesia (BI) reported survey of business activities result in the third quarter / 2016 were not as high as the previous quarter. The decline in growth reflected from Net Balance Weighted (SBT), which is obtained by multiplying the net balance and weight of each sector of the economy, amounting to 13.20%. The percentage was lower compared with the second quarter / 2016 amounted to 18.40%. According to the Bank Indonesia, the decline in the growth in accordance with the historical pattern after a moment of Ramadan and Eid.
"The activities of the business world tends to slow down in the last six months will certainly have an impact on the rate of economic growth in the 2nd half of 2016. It becomes a much more serious challenge. Credibility of the economic cabinet being tested. Is it able to boost or simply resigned to the cycle. Coordination of the economic team should also be strengthened, "he added.
Based on the survey, the performance of the manufacturing sector in the quarter III / 2016 indicated slowed by SBT of 1.09% or more lower than the previous quarter of 3.41%. The manufacturing index also known to have contracted into a 48.74% down from the previous quarter amounting to 52.38% based on the value of Prompt Manufacturing Index (PMI). PMI contraction of the manufacturing sector due to the contraction in almost all components, especially the order volume index and the index of number labor recorded respectively by 47.01%.
In addition, the BI survey also indicated business activity Quarter IV / 2016 which will not be as high as the previous quarter. SBT business activity ahead the end of the year is estimated at 0.34%. Lack of business activity mainly due to the contraction in the agriculture sector, plantation, livestock, forestry and fisheries, and mining and excavation. Slowing in corporate world is also indicated by the decline of production capacity, a decrease in production volume as well as the contraction of using labor.
"The decline in terms of production or supply, I think it is also related to the weakness of purchasing power. This is also evident from the decline core inflation, the trend is still declining. We can see the data CPM core inflation recorded 0.33% in September 2016, down from August 2016 amounted to 0.36%, which indicates a society that suppress consumption. We urge the government to look for new policy which increases the purchasing power of the people, "he said.
The weakening of the general economy is also influenced by the contribution of government consumption decreased over central government spending cuts which is big enough and the slow pace of local government spending so affect private investment in the real sector.
"Measures to suppress illegal payments in the bureaucracy I think is very positive and will provide a better business climate. Also lowering dark costs burdening the business world. We urge the government to consistent in this regard. But that is also very important, the government should really optimize the absorption of spending in the center and the regions. Especially related to infrastructure projects and intensive programs. Package of social programs for the poor and the control of prices should also be realized well to increase the purchasing power of the people, "lid Ecky. (NR)