REPUBLIKA.CO.ID, JAKARTA -- The Finance Ministry is unlikely to revise the 2018 state budget as it did in the previous years, in order to reduce economic uncertainty during the political year.
The ceilings of revenues and expenditures in the 2018 state budget have been designed conservatively, chief of the ministry's fiscal policy board, Suahasil Nazara said here on Tuesday.
The conservative design of fiscal instrument is reflected by state revenues, projected to grow 9 percent, and state expenditures, expected to increase 4 percent, of the realization in 2017, he stated.
As such, the 2018 state budget deficit is set at 2.2 percent of the gross domestic product, down from the government's forecast of 2.67 percent for this fiscal year, he added.
"Next year, we will try to keep the deficit at 2.2 percent. The narrative that we are developing now is to avoid revising the state budget in 2018," he remarked.
He noted that the political condition next year will be very dynamic. Hence, the state budget, as a fiscal instrument, needs to be designed in such a credible way that it will not be "overhauled."
A revision of the state budget in the midst of political dynamics will add to a source of uncertainty, he revealed.
"Next year will be the year of regional head elections, which may serve as preparations for the year of presidential election. The number of voters in the regional head elections will account for 75 percent of the number of voters in the presidential election, thereby heating up the political condition," he explained.
After all, the ministry remains optimistic that the economic growth target of 5.4 percent for 2018 could be achieved.
"(The economy) must continue to grow. If the economy grows 5.4 percent and the inflation rate stays at 3.5 percent, then (the state revenues) will grow 9 percent," he elaborated.
Based on the 2018 state budget endorsed at the parliament, the target of state revenues is set at Rp1,894.7 trillion, and the ceiling of state expenditure is projected at Rp2,220.7 trillion.
The state revenues comprise Rp1,618.1 trillion from tax receipts and Rp275.4 trillion from non-tax state revenues.
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