Indonesia statistic bureau announced Indonesia GDP expands 4.73% yoy in 3Q, higher than 4.67% in the previous quarter but less than than consensus expectation for 4.8% growth. The economic growth in 3Q is driven by government spending that grew 6.56%yoy while household consumption which accounts for more than half of the economy expanded 4.96% in 3Q. The economy is however might miss this year’s target of 5.7% as stated in the revised state budget 2015. Darmin Nasution, the coordinating economic minister acknowledged that it would be hard to achieve 5% growth this year given persistent weak global growth and prolonged weak commodities prices leading a declining export growth.
Meanwhile, government unveiled economic policy package VI yesterday containing tax incentive for investors aiming to invest in special economic zones. Government will reduce income tax up to 100% for investors who are willing to invest more than IDR 1 trillion in eight special economic zones. Other incentives are included the exemption of value added tax and luxury sales tax for imports and foreign property at these eight special economic zones.