Research shows Indonesia's new capital not likely to spur economic growth

Small settlements dot Penajam District, North Penajam Paser, East Kalimantan, where the new capital will be constructed.- JP/ANN

JAKARTA (The Jakarta Post/ANN): Indonesia’s new capital city will only contribute an additional 0.02 of a percentage point to the country’s economic growth, and the impact will also be short lived, according to Institute for Development of Economics and Finance (Indef) research.

The research estimates that in the short run, the new capital city will contribute 0.17 of a percentage point to total investment, 0.02 of a percentage point to total exports and imports and 0.05 of a percentage point to total employment rates.