JAKARTA (TheInsiderStories) – Indonesian government prepares Rp420.5 trillion (US$29.41 billion) for infrastructure projects in 2019 State Budget, said Finance Minister on Thursday (16/08). The amount higher 2.46 percent compared to this year targets with amount of Rp410.4 trillion.
Sri Mulyani Indrawati told reporters at the press conference on 2019 State Budget, government has plan to build road 2,007 kilometers; 16 toll roads; railways 415.20 kilometers; bridge 27,067 kilometers; 48 dams; 162,000 hectares irrigation; four airports; housing 84,000 and flat 7,512 units in 2019.
This year, government has target to build 2,271.3 kilometers; bridge 52,449 kilometers; railways 615.05 kilometers; four airports; 23 toll roads; 48 dams; irrigations 194,700 hectares; housing 50,000 units and flats 13,405 unit.
According to her, government has plan to finance the 2019 State budget from tax revenues Rp1,781.0 trillion, non-tax revenues Rp361.1 trillion, grant Rp400 billion and government bond issuances Rp374.3 trillion or in total worth of Rp2,516.8 trillion.
In his speech at the member of House of Representatives, President Joko Widodo sets economic sets a fiscal deficit of 1.84 percent from gross domestic products (GDP). He explained, the 2019 State budget basic assumptions is expected to be very dynamic and challenging.
Economic growth will be driven in the range of 5.3 percent, inflation in the range of 3.5 percent plus minus 1 percent, Rupiah in the range of Rp14,400 per US dollar, Indonesian crude oil price of $70 a barrel, lifting oil is estimated reaching an average of 750 thousand barrels per day, while natural gas lifting is estimated at an average of 1,250 thousand barrels per day.
State expenditure, he reported, reached Rp2,439.7 trillion or 15 percent of GDP. The amount, continued the President, was 10 percent higher than the estimated realization of state expenditure in 2018.
“The quality of state spending will be further enhanced and focus on spurring the economy and creating more equitable and fair people’s welfare,” said Widodo.
The budget deficit and debt to GDP ratio, according to him, will remain controlled within the safe limits, in accordance with the provisions of Law Number 17 of 2003 concerning State Finance. He said, in 2019, the Government continues to take a measured expansionary fiscal policy, in order to encourage a sustainable and equitable economy for all Indonesian people.
“This is indicated by the smaller APBN deficit from 2.59 percent of GDP in 2015 to around 2.12 percent in 2018 and in 2019 will be reduced to 1.84 percent,” the President said.
The primary balance deficit, which in 2015 reached Rp142.5 trillion, dropped to only Rp64.8 trillion in 2018, and continues to be directed lower towards a deficit of Rp21.7 trillion in 2019.
In addition to reducing the budget deficit andto control additional debt, said President, the Government also reduced budget financing in 2019 by 5.4 percent.
“This controlling measure is consistent with that carried out in 2018, which also reduces financing by around 14.3 percent,” said Widodo.
With the budget deficit and the smaller primary balance deficit, realistic income increases, better quality and targeted spending, and prudent and productive financing, President hopes that the state budget will be healthier, fairer and more independent.
He also said, in the midst of the ongoing world economic uncertainty, Indonesian economy continues to grow at around 5 percent per year, and inflation is always around 3.5 percent. In fact, inflation in June 2018, according to him, was suppressed at 0.59 percent or the lowest compared to inflation during the National Religious Holidays in the last seven years.
Stable economic growth and maintained inflation control, said the President, making economic growth become more quality and impact can be felt. The open unemployment rate dropped to just 5.13 percent in February 2018.
In addition, for the first time, according to the President, the percentage of Indonesia’s poverty fell to single digit figures, namely 9.82 percent in March 2018.
“We have succeeded in reducing the poverty rate from 28.59 million or 11.22 percent in March 2015 to 25.95 million or 9.82 percent in March 2018,” president said.