The 2023 budget aims to consolidate fiscal positions after the deficit was allowed to stretch beyond a legally-mandated 3% ceiling in the last three years for emergency response to the pandemic.
Indonesia’s economic growth and inflation targets for next year were set at 5.3% and 3.6%, respectively. Total revenues were approved at 2,463 trillion rupiah, slightly higher than proposed by the president last month at 2,443.6 trillion rupiah.
Southeast Asia’s largest economy has been recording a trade surplus every month since May 2020, on the back of strong commodity exports and the government expects to end this year with growth of about 5%.
Bank Danamon economist Irman Faiz said that spending and revenue targets were “realistic”, but inflation could be higher than 4% due to ongoing disruptions in global supply chains.
Details of the approved 2023 budget:
Budget assumptions 2023 budget 2022 budget
outlook
Economic growth (%) 5.3 5.1-5.4
Inflation (%) 3.6 4.0-4.8
10-year bond yields (%) 7.9 6.85-8.42
Rupiah exchange rate/$ 14,800 14,500-14,900
Indonesia crude $90 $95-$105
price/barrel
Oil lifting (bpd) 660,000 625,000-630,000
Gas lifting (boepd) 1.100mln 956,000-964,000
(in trillion rupiah) 2023 budget 2022 budget
Revenues 2,463 2,266.2
– Tax revenues 2,021.2 1,784
– Non-tax revenues 441.4 481.6
Expenditure 3,061.2 3,106.4
– Energy subsidies 211.98 208.9
Surplus/deficit -598.2 -840.2
– as of GDP -2.84 -4.5
Deficit financing 598.2 840.2
Debt issuance 696.3 943.7
($1 = 15,250.0000 rupiah)
Source: Economy - investing.com
