Essay About Nation’S Consumption And Food Distribution

Government Spending in Indonesia
Essay Preview: Government Spending in Indonesia
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Macroeconomic Assignment[pic 1]1.Audrey Salsabila197172102.Muhammad Berdauno197170303.Try Asih Wulandari19717094ConsumptionBank Indonesia predicted that the economy of Indonesia will grow from 2017. In 2018, investment, government spending, and exports will contribute to Indonesian economic growth. The government will be able to boost or upgrade their controlling in inflation with better logistics and food distribution which will help stabilize the citizens’ purchasing power and nation’s consumption will grow.InvestmentAs the consumption section says, the government will focuses on three sector; investment, consumption or government spending, and exports. The help of the three international rating agencies; Fitch, Moody’s, and Standard and Poor’s (S&P), made Indonesia’s sovereign rating to investment grade. The growth of Indonesia’s economy will also be helped by the domestic demand whether it is investment or household spending.Interest rateBased on tradingeconomics article, they predict that our interest rate in the 3rd quartile of 2018 will still 5.25%. In the 4th quartile of 2018 our interest rate will increase to 5.5% and will constantly stable at 5.5% until 2020. People will tend to saving their money in the 4th quartile rather than spending it because of the increasing of interest rate. After a few time, people will spend their money because of the prediction that our interest rate will keep stable at 5.5% until 2020. Rather than having our money saved in the bank, it is preferable to spend our money on business if the interest rate is stable.Government SpendingBased on last years data, the Goverments spending increased by 22.9 percent, ie Rp 208.4 trillion ($ 14.6 billion). Most of the expenditure is to build infrastructures, such as the construction of new highways, bridges, airports and 618 kilometers of railway networks. Infrastructure development is a long-term economic development plan. Poor infrastructure is the main obstacle to creating new growth engines for the economy to rise. Improved infrastructure is important to reduce production costs, reduce transportation costs, reduce distribution costs, reduce distribution costs. The impact of infrastructure development can not be seen today, but we will prove it in 2019, the economy will increase due to the faster decrease of the transportation cost as the road is a freeway.