The main concern regarding the revision, however, lies in the increased budget deficit.
he government is proposing a draft revision of the 2017 state budget (RAPBN-P 2017) to the House of Representatives for approval, with a number of adjustments to its social and economic goals.
In the macroeconomic indicators in the draft of the revised 2017 state budget, for example, only oil and gas liftings remain the same. The targets for economic growth, inflation, the rupiah exchange rate against the US dollar and the three-month government Treasury Bill (SPN) are all changed.
The main concern regarding the revision, however, lies in the increased budget deficit, which is proposed to increase to 2.92 percent of the gross domestic product (GDP) from 2.41 percent in the original budget. Increasing the deficit is quite risky, because it is nearly at the legal threshold of 3 percent of GDP.
The Finance Ministry is confident that the realized deficit in 2017 will not exceed the targeted 2.92 percent. Finance Minister Sri Mulyani Indrawati believes that the realized deficit can be reduced to 2.67 percent, since the budget disbursement is normally below 100 percent. Last year, the realized budget disbursement reached only 98 percent.
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