Subsidies, on the other hand, will be hiked.
The Indonesian government plans to keep fuel prices and electricity tariffs unchanged over the 2018-2019 period and will hike subsidies in order to increase the domestic purchase power parity. This proposal will not disrupt the planned budgetary reforms.
The country's GDP increased by 5.07% in 2017 (the best pace in the last four years) but domestic consumption remained sluggish around 5%, a figure lower than the pre-crisis rate of 6%. The government spent IDR97.6tr (US$8.67bn) on energy subsidies in 2017 and plans to spend an additional IDR5tr (US$350m) for electricity subsidies in 2018.
This article was originally published by Enerdata.
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