Banking Role Boosts Seven Percent Economic Growth

MAGELANG- Banking circles must make strategic steps to take the role of working on potential market niches in the regions to boost economic growth of 7 percents.

Economist at Soegiyapranata University, Prof. Andreas Lako, revealed that with high economic growth, this would certainly be a blessing for banks. From the demand side, innovative ideas are needed to increase public consumption. Likewise with investments coming into Central Java, this investment financing portion can be optimized for banks.

“How can banks, especially Bank Jateng, respond to this increase in consumption and investment, for example by providing credit schemes to increase public consumption, as well as ease of incentives, for example for incoming investors,” said Andreas Lako in Central and Central Java FGDs Growing High and Inclusive from Central Java to Indonesia in Magelang on Thursday (1/23). Also present at the FGD were guided by Senior Economist of Bank Jateng Dr. Bagus Santoso, Economist from Undip Dr. Maruto Umar Basuki and Dr. Mulyanto from UNS Surakarta.

Interventions in terms of financial literacy to the public, especially in areas where poverty rates are still high are also needed therefore business development can be more passionate and growing. With greater employment, the level of inequality that exists with other regions is also expected to decrease. “Territorial analysis is important, make a good business roadmap or review and improve to lead to 7 percents growth,” he said.

According to Maruto, over the past five years an increase in foreign investment (PMA) investment was followed by a decrease in labor force. It also needs to be considered to drive development in the village that must be grown in order to accelerate people’s income in rural areas. This can be done through other sectors that can help stimulate business such as agro-industry.

“With the orientation towards rural development, it will certainly grow a lot of sectors that have the potential to be able to boost the regional economy,” Maruto said.

Meanwhile, from the Greater Solo region the contribution of the processing industry and construction is also quite large in the region.

According to UNS Economist Mulyanto, Solo was largely contributed by the construction sector where investors competed to build hotels, or other properties.

“Money is flowing there, wholesale and retail trade is also growing high. “The information and communication sector from 7 regions in Solo Raya is growing and banks can certainly take a role to boost the regional economy,” he explained.

He added, in Klaten, for example, there were also many villages that had developed rapidly and had succeeded in increasing the economic income of its citizens, especially in the tourism sector with its natural potential.