REPUBLIKA.CO.ID, JAKARTA -- Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance Febrio Kacaribu assured that the State Revenue and Expenditure Budget (APBN) has been designed to withstand global shocks.
“We've been anticipating it since last year. The State Budget, as we have shown especially since 2022 when oil prices were above 100 US dollars per barrel, the government has played the State Budget strongly as a shock absorber,” Febrio said during the BNI Investor Daily Summit 2023 in Jakarta, Tuesday (24/10/2023).
Febrio said the Finance Ministry had looked at a range of global risks that might fuel uncertainty going forward. It took into account the Russian-Ukrainian war that took place since last year and still continues today, coupled with the escalation of conflict in the Middle East.
In addition, trade and economic relations between the United States and China also have the potential to pose divergent risks and competition going forward.
The vulnerability of the internals of the US economy, which is still overshadowed by rising interest rates and high inflation, can also affect the instability of the external sector of the Indonesian economy. Therefore, the government designed the state budget to remain resilient amid global economic uncertainty.
Febrio said the Ministry of Finance is focusing on boosting people's purchasing power in order to inhibit the growth rate of poverty so that people's welfare is maintained. The boost in purchasing power is also expected to maintain stability so that the process of economic activity can remain well underway.
The government is also focused on maintaining the state budget deficit. The government managed to squeeze the state budget deficit from 6.09 percent in 2020 to 2.35 percent in 2022. The achievement is under the mandate of Law No. 2 of 2020 which sets the state budget deficit limit needs to return below 3 percent by 2023.
“The consolidation is a year early,” Febrio said.
From the progress of the 2023 State Budget to date, he said, the direction of the deficit could likely move to below 2.3 percent. The Finance Ministry is trying to keep the economy moving so that overall growth this year can stay above 5 percent.
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