REPUBLIKA.CO.ID, JAKARTA -- Program Director of the Institute For Development of Economics and Finance (INDEF) Berly Martawardaya said the draft state budget (RAPBN) for 2018 is more prudent than its predecessors.

"We see the 2018 RAPBN is at least more prudent. The state budgets in the last three years were too ambitious as indicated by the continous failure in reaching government's tax revenue target," Berly said at a public discussion on "RAPBN 2018: Jokowi's Fiscal Policy Stake" here on Friday.

He said in 2018 RAPBN, the targets for spending, and deficit as well as government debts grow more moderately than in previous years.

In 2018, spending target is set at Rp12,204.4 trillion growing 3.3 percent from Rp2,133.3 trillion in 2017. The spending growth target was lower than 8.2 percent growth in income from Rp1,736.1 trillion in 2017 to Rp1,878.4 trillion in 2018.

The target for budget deficit is Rp325.9 trillion down from Rp397.2 trillion in 2017. The deficit ratio declined from 2.93 percent to 2.19 percent. Meanwhile the target for new government debts are set lower at Rp399.2 trillion in 2018 from Rp461.3 trillion in 2017

"There are attempt to redress the balance sheets such as when a company planning to go public . They have to settle debts, make capital injection , etc to be ready to go public. This is to make things neat and clean until 2019 as if to remove anything negative ahead of legislative and presidential elections in 2019," Berly said.

Also read: 5.4 percent of growth rate quite optimistic, not ambitious: Sri Mulyani

He said there is indeed slight improvement in the 2018 RAPBN, but the macro targets need addressing especially economic growth and inflation targets.

The 5.4 percent target for economic growth will need harder work for its realization, he said, adding "Though not impossible, the challenge is quite big."

The inflation target of 3.5 percent in 2018 or lower than 2017's target of 4.3 percent was based on improvement in logistics and distribution systems, he said.

"I think it would not be easy," he added.

On Thursday, Finance Minister Sri Mulyani Indrawati said the country's economic growth target of 5.4 percent set in the 2018 draft state budget is quite optimistic, but no ambitious.

"In my opinion it is quite optimistic but not too ambitious," Sri Mulyani said after giving a news conference on the financial note and the draft law on 2018 state budget.

The minister expressed confidence the target could be reached with the improvement in household consumption, which is expected to grow 5 percent in 2018.

In addition, the economic growth is also expected to be sustained by investment sector which is predicted to grow more than 6 percent and exports which are projected to grow 5 percent.

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