Government targets domestic product spending to reach Rp500 trillion

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan targets domestic product spending (PDN) by the government through e-catalogs to be increased to Rp500 trillion this year, higher than the previous target of Rp400 trillion.

“Government spending on domestic products (PDN) in 2022 is targeted at Rp400 trillion, and we previously reported it to the president, if we can continue to increase it maybe to Rp500 trillion in April and be completed by May 31, then the figures on economic growth will be visible this year,” Pandjaitan stated during an affirmative action of Proud of Made in Indonesian Products (BBI) that was broadcast online from Bali, Friday.

Pandjaitan explained that based on the calculation of Statistics Indonesia (BPS), if Rp400 trillion of government spending was spent domestically, then it would encourage economic growth of around 1.6 percent to 1.7 percent.

“The government estimates economic growth at around 5-5.2 percent this year. With the addition of one percent to 1.7 percent, our economic growth will be around six percent more,” he stated.

This action will be able to create demand for domestic products and strengthen supply through capacity building for industrial development and new investment.

“I think this is very good because the government is the biggest buyer,” he affirmed.

On the other hand, the program will also support the creation of two million new jobs.

To support the commitment of spending on domestic products, the government continues to encourage acceleration in the formation of the Team for Increased Use of Domestic Products (P3DN Team) throughout Indonesia, complementing the existing ones in 25 ministries/institutions, eight state-owned enterprises and 103 regional governments.

Furthermore, the National Public Procurement Agency (LKPP), Ministry of Industry, Ministry of Home Affairs, and Ministry of Finance have made improvements to the government’s digital shopping ecosystem to support the acceleration of non-cash payments through government credit cards with QRIS.

“With a government credit card, it will reduce our costs by approximately 20-30 percent. Hence, whether we like it or not, it will be more efficient in future,” the coordinating minister stated.

The government is preparing an e-catalog for the procurement of goods and services to be able to absorb domestic products. The electronic catalog currently shows 200 thousand local products and is targeted to reach one million products by the end of 2022.

Source: Antara News

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June 2023