January 28, 2009 / 5:37 AM / 11 years ago

Indonesia fin min proposes $6.3 bln stimulus package

JAKARTA, Jan 28 (Reuters) - Indonesia’s government has proposed an economic stimulus package worth 71.3 trillion rupiah ($6.32 billion) in a bid to sustain growth in Southeast Asia’s biggest economy, the finance minister said.

Details of the package, which needs to be approved by parliament, have been announced previously in bits and pieces. It includes tax incentives for companies and individuals, cuts in fuel and electricity prices and infrastructure spending.

Finance Minister Sri Mulyani Indrawati proposed the package to parliament on Tuesday.

“The fiscal stimulus is aimed at sustaining consumer spending, strengthening businesses and developing labour-intensive infrastructure projects,” Indrawati said in a statement.

Parliament last year passed a new tax law which cuts corporate income tax to 28 percent in 2009 and 25 percent in 2010 from 30 percent in 2008.

On Jan. 5, Indrawati said the government would spend 72 trillion rupiah on infrastructure and other projects to counter the global economic downturn and to create jobs.

Indonesia’s government is under pressure to support the economy ahead of parliamentary and presidential elections this year.

The government has forecast economic growth will slow to 4.5-5.5 percent in 2009, down from an estimated 6.2 percent last year. ($1 = 11,290 Rupiah) (Writing by Dicky Kristanto; Editing by Ed Davies)

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