BPS Reveal Contracted Government Consumption, Signals State Budget Restructuring Continues

JAKARTA - The Central Statistics Agency (BPS) reported that government consumption throughout the second quarter showed negative growth with minus 5.24 percent on an annual basis or year on year (YoY).

Head of Central Statistics Agency (BPS), Margo Yuwono, said that the score was a calculation based on gross domestic product (GDP) growth by expenditure.

"All expenditure components achieved growth, except for government consumption, which contracted," he said through a virtual channel when giving a press statement on Friday, August 5.

According to Margo, there have been several slowdowns by the government that have caused the consumption rate to be in the red zone.

"The government's contraction cannot be separated from the decline in the realization of personnel expenditures as well as goods and services expenditures in the State Budget (APBN)," he said.

According to VOI records, government spending has begun to sag, as can be seen from the absorption of the health budget, which tends to experience a downward trend following the increasingly controlled COVID-19 pandemic.

This is reflected in the realization of the health cluster PEN budget in the first semester of 2022, which has only absorbed IDR 31.8 trillion or 25 percent of the budget ceiling of IDR 122.5 trillion.

To note, the government is currently also trying to take steps to strengthen fiscal instruments towards a deficit target of below 3 percent of GDP in 2023 by the mandate of Law No. 2 of 2020.

As for the achievements until June 2022, the State Budget still posted a positive performance with a surplus of IDR 73.6 trillion or plus 0.39 percent of GDP.