Discussion of Capital Utilization for Regional Economic Forecasting

Samarinda, 18 June 2021, 09.00 WITA. Bappeda of East Kalimantan Province attended an online discussion activity on the use of capital for regional economic forecasting. This event was organized by Bappenas RI and attended by Bappeda Provinces throughout Indonesia and USAID. The speakers presented at this event were Amalia Adinga Widyasanti as Deputy for Economics at the Ministry of National Development Planning/Bappenas of the Republic of Indonesia, Peter Novak as representative of USAID Indonesia, and Prof. Arief Anshoru Yusuf as representative of Padjadjaran University Lecturers.

In his presentation, the Deputy for Economics at Bappenas RI stated that the development of the SAPER model is needed to project the rate of economic growth at the provincial level. The SAPER model uses a specific model for each province, so that the variables determining growth rate are adjusted to the characteristics of each province. The SAPER model uses high frequency variables so it needs to be updated regularly. The variables determining growth in the SAPER model need to continue to be updated following the latest developments, so regular discussions are needed with regional officials regarding factors that influence the rate of economic growth in the region.

Meanwhile, Peter Novak from USAID Indonesia said that similar to the situation in other countries in the world and in the region, the Indonesian Government is currently facing the dual challenge of responding to the economic disruption caused by the global COVID-19 crisis and maintaining its commitment to fund the achievement of its ambitious economic reform agenda. In Indonesia, the Government's rapid strategic response will help keep the country on track to become one of the world's largest economies in the coming decades.

The development partnership between the Government of Indonesia and the United States has been going on for a long time. USAID's commitment to strengthening and supporting Indonesia's development has been ongoing for many years. The establishment and implementation of USAID's Economic Growth Support Activity (EGSA) highlights this commitment to support the Government of Indonesia in economic planning, budgeting, revenue mobilization, and development of a strong private sector.

One ​​of the many outcomes of the ongoing partnership, which is our current focus, is the establishment of a regional macroeconomic forecasting model called the Regional Economic Forecasting Analysis System or SAPER. This model is expected to strengthen the capacity of Bappenas and Bappeda in economic planning by enabling financial planners to estimate the appropriate economic response to various changes in government policy.

In the future, the SAPER model will be a powerful and effective tool for local and national governments to adapt their policies and regulations to improve the efficiency and effectiveness of government spending, enable a better economic environment for doing business, and accelerate economic recovery.

Prof. Arief Anshory Yusuf from Padjadjaran University said that the Regional Economic Forecasting Analysis System (SAPER) is a model for forecasting provincial economic growth in Indonesia which uses quarterly economic data to predict the rate of provincial economic growth (LPE) and Gross Regional Domestic Product (GRDP) for the next four quarters. The use of SAPER is expected to improve the alignment of national level economic growth planning with planning at the provincial level.

SAPER supporting data needs to continue to be updated to get better forecast results, including: Gross Regional Domestic Product (GRDP) Growth, National Gross Domestic Product (GDP) Growth, Percentage changes in commodity prices, Variables related to the COVID-19 pandemic and other variables.

Economic Growth Support Activity (USAID EGSA) supports the Government of Indonesia in its efforts to promote sustainable economic growth. USAID EGSA is a technical assistance facility funded by USAID and aims to support efforts to increase technical capacity in tax collection, budgeting, public spending, financial accountability; and creating an environment that supports ease of doing business.

From the implementation of this activity, it was concluded that to improve the quality of the preparation of the microeconomic framework in the Government Work Plan, Bappenas, in collaboration with the US Agency for International Development (USAID) through the Economic Growth Support Activity (EGSA) project, is developing a Regional Economic Analysis and Forecasting System model, abbreviated as SAPER. The model is shown as a tool for quarterly regional economic growth projections by combining current economic conditions.

SAPER supporting data needs to continue to be updated to get better forecast results, including: Gross Regional Domestic Product (GRDP) Growth, National Gross Domestic Product (GDP) Growth, Percentage changes in commodity prices, Variables related to the COVID-19 pandemic and other variables. The Economic Growth Support Activity (USAID EGSA) supports the Government of Indonesia in its efforts to promote sustainable economic growth. USAID EGSA is a technical assistance facility funded by USAID and aims to support efforts to increase technical capacity in tax collection, budgeting, public spending, financial accountability; and creating an environment that supports ease of doing business.

(HumasBappeda/Ismi).