Jakarta. President Joko Widodo says the government will work hard on improving economic growth and speeding up infrastructure development to boost positive sentiment in the country’s capital markets.
“[Economic growth] will give a good perception for the capital market,” Joko told reporters at the Indonesia Stock Exchange’s (IDX) 38th anniversary in Jakarta on Monday.
“That perception will spur optimism and move the market. It will also affect the local currency, even though pressures from the global economy are still there.”
Joko predicted in April that the benchmark stock measure could reach 6,000 this year.
The Jakarta Composite Index dropped 0.76 percent to 4,770.30 at Monday's close, and is down 9 percent since the start of the year.
On Monday trading foreign investors, which contributed to 36 percent of the day's trading, dumped Rp 259.7 billion ($19.1 million) more shares than they bought. Decliners beat gainers 183 by 74.
An index which traces 64 basic and chemical industry stocks declined 29 percent, leading the sectoral decline.
Company earnings have been hurt by slow growth with some blue chips companies like Astra International, Indofood Sukses Makmur and lender Bank Negara Indonesia posting poor financial performances.
Indonesia’s economy grew at its slowest pace in six years during the first half of the year at an annualized rate of 4.67 percent, prompting the government to revise its full-year growth target to between 5.0 and 5.2 percent, from the 5.7 percent projected in the 2015 state budget.
“Our country’s economic slowdown is a consequence of sluggish growth around the world. It’s not only Indonesia … Just watch what happens in the second half of the year,” the president said.
“We have to admit that only a small amount of the budget was realized in the first half … but we will boost spending in the second half.”
In the first half of the year, the government spent just 12 percent of the Rp 290 trillion allocated for infrastructure development for the full year.