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Govt relies on inner strength amid external risks with 2024 budget
Analysts say the GDP growth target of 5.2 percent is achievable but note risks of imported inflation and rising food prices.
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President Joko “Jokowi” Widodo raises his fist while delivering his State of the Nation Address at the House of Representatives in Jakarta on Aug. 16, 2023, the day before Independence Day. (Antara/Galih Pradipta)
T
he budget plan for next year reflects the government’s confidence to increase revenue collection despite external uncertainty stemming from an economic slowdown in Western countries and geopolitical tension between the United States and China.
Analysts believe the GDP growth target of 5.2 percent is optimistic but achievable.
However, they also caution that food prices may surge because of the El Niño weather pattern, while fluctuating commodity prices and rupiah depreciation could push up imported inflation next year.
The 2024 state budget assumes a gap of Rp 522.8 trillion (US$34 billion) between revenue and spending. That is 12.6 percent down from the deficit of Rp 598.2 trillion stated in this year's plan and amounts to around 2.29 percent of GDP.
For its budget calculation, Indonesia assumes a rupiah exchange rate of Rp 15,000 per US dollar next year and a yield of 6.7 percent on 10-year government bonds.
"The 2024 state budget is formulated to address present and future challenges, so it is directed at accelerating inclusive and sustainable economic transformation," President Joko "Jokowi" Widodo told lawmakers on Wednesday.
For the short term, Jokowi said, the state budget would be focused on eradicating extreme poverty, reducing the prevalence of stunting, controlling inflation and increasing investment.
