Indonesian government and House of Representatives The House' budget committee approved the government regulation in lieu of law Number 1 of 2020 regarding State Finance and Financial System Stability for Handling the COVID-19 Pandemic in Order to Face Threats that Endanger of the National Economy or Financial System Stability - Photo: Privacy

JAKARTA (TheInsiderStories) – Indonesian House Budget Agency approved the 2020′ macro assumptions in the draft state budget. With this agreement, the state budget will proceed to a plenary meeting to be passed into law,” said the Chairman in the meeting with government on Monday (9/23).

House Budget Chief Kahar Muzakir said the board working meeting with the government was attended by 34 people from nine factions. All factions agreed to bring the 2020′ macro assumptions to the plenary meeting.

The agreed macroeconomic assumptions include, among others, economic growth at 5.3 percent, inflation at 3.1 percent, the average exchange rate of Rp14,000 per USD, and the state treasury coupon rate of 5.4 percent.

While the price of oil is estimated to be at US$63 per barrel. Lifting oil is estimated at around 755 thousand barrels and lifting natural gas at 1.19 million barrels.

The House Budget also agreed on an unemployment rate of 4.8-5.0 percent, a poverty rate of 8.5-9 percent, a Gini ratio of 0.375 to 0.380, and a human development index (HDI) of 72.51.

Then, the state revenues are set around Rp2,223 trillion (US$156.54 billion), up Rp11.6 trillion from the initial amount of Rp2,221 trillion. Meanwhile, state expenditure also increased by Rp11.6 trillion from Rp2,528.8 trillion to Rp2,540.4 trillion.

From the expenditure, the government will allocate around Rp2 trillion for the removal of the capital. Minister of National Development Planning Bambang Brodjonegoro said the budget will be used by 5-6 ministries for new capital development projects.

Previously, Indonesia’s state budget deficit swelled to Rp104.7 trillion ($12.93 billion) or 1.4 percent of the gross domestic product (GDP) in July, higher than the previous month of Rp135.8 trillion or 0.84 percent of GDP.

Finance Minister Sri Mulyani Indrawati said the widening of the deficit was due to skyrocketing state spending. Meanwhile, state revenues were unable to balance the pace of spending due to global economic turmoil, such as economic uncertainty to commodity price fluctuations on the international market.

In terms of revenue, the country’s financial pockets have been filled as much as Rp1,052.8 trillion or 48.6 percent of the revenue target of Rp2,165.1 trillion by the end of the year. State revenue posts grew 5.9 percent this month or lower than July 2018 which reached 16.5 percent.

While state revenues reached Rp1,052 trillion and grants of Rp800 billion. State revenue was contributed by taxation bags of Rp810.7 trillion or 45.4 percent of the target Rp1,786.4 trillion. The post which has been the main pillar of the country’s revenue only grew 6.1 percent last month. In fact, in July 2018 it was able to grow to around 16.2 percent.

Then, the non-tax state revenue of Rp241.3 trillion or has filled 63.8 percent of the target Rp378.3 trillion. Receipt of this post grew 14.2 percent, but again lower than the same period last year reaching 22.7 percent.

On the other hand, the realization of spending has reached Rp1,236.5 trillion or 50.2 percent of the target Rp2,461.1 trillion. State expenditure grew 7.9 percent or higher than the same period last year which was only 7.7 percent.


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