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Govt eyes 6 percent economic growth in 2025
The Finance Ministry’s draft annual financial plan projects significant acceleration in GDP growth next year to surpass the 5 percent that has generally prevailed over the last decade, excepting the COVID-19 and post-pandemic era.
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Finance Minister Sri Mulyani Indrawati prepares to present the state budget on Jan. 2, 2024 at the ministry in Jakarta. (The Jakarta Post/Deni Ghifari)
T
he government is banking on significant acceleration in GDP growth next year, according to the Finance Ministry’s draft macroeconomic projection and fiscal policy (KEM-PPKF), which is to be presented to the House of Representatives in August as part of the 2025 state budget bill.
The draft KEM-PPKF projects economic growth of between 5.5 and 6 percent in 2025, considerably stronger than GDP growth that has hovered around 5 percent for most of the past decade, excepting the years of the coronavirus pandemic and subsequent recovery period.
The draft appears much less certain with regard to consumer prices, as it sees inflation anywhere between 1.5 and 3.5 percent. That would be in line with Bank Indonesia’s target range for this year and next year, which is set at 2.5 plus/minus 1 percent.
It also assumes an exchange rate of Rp 14,900 to Rp 15,300 per US dollar, according to state-owned news agency Antara, citing figures from a meeting report on the KEM-PPKF.
The draft document envisions state revenue from 12.08 to 12.77 percent of GDP, state spending from 14.21 to 15.22 percent of GDP, a primary balance from minus 0.40 percent to 0.07 percent of GDP and a deficit of 2.13 to 2.45 percent of GDP.
The projected yield of the10-year government bond ranges from 6.3 to 7.5 percent.
Meanwhile, crude oil price is projected to range from US$70 to $90 per barrel, with domestic crude oil production ranging between 606,000 and 684,000 barrels per day and gas production of 1.06-1.15 million barrels of oil equivalent per day.
