Amid The Threat Of Global Economic Uncertainty, The Chairperson Of Banggar Is Optimistic Of RI's Economic Growth Above 5 Percent

Chairman of the House of Representatives' Budget Agency (Banggar), Said Abdullah. (Photo: Doc. Antara)

JAKARTA - Responding to the Government's Submission of the Macroeconomic Framework and Fundamentals of Fiscal Policy (KEM-PPKF) RAPBN FY 2023 which was read out by the Minister of Finance of the Republic of Indonesia at the 22nd Plenary Meeting of the Indonesian Parliament, Chairman of the Budget Agency (Banggar) DPR RI Said Abdullah is optimistic that Indonesia can meet the economic growth target in the range of 5.3-5.9 percent in 2023.

"Regarding the discussion of KEM-PPKF, Macroeconomic Policy and the Government's Fiscal Policy Principles in the 5.3 to 5.9 percent growth range, I am optimistic that we can achieve the 5.3 percent target. This means that we include the assumption target. "We agreed between the DPR and the government on the basis that in 2022 the resilience of our APBN or resilience is good as it has been going. In fact, our windfall profit is almost Rp. 425 trillion," Said said in a written statement, quoted on Saturday, May 21.

Said detailed, the government proposed a range of macroeconomic indicators used as the basic assumptions for the preparation of the 2023 RAPBN as follows: economic growth of 5.3 percent to 5.9 percent; inflation 2.0 percent to 4.0 percent; Rupiah exchange rate of IDR 14,300 to IDR 14,800 per US dollar; 10-Year SBN interest rate 7.34 percent to 9.16 percent; the price of Indonesian crude oil 80-100 US dollars per barrel; oil lifting 619 thousand - 680 thousand barrels per day and gas lifting 1.02 million to 1.11 million barrels of oil equivalent per day.

Previously, Finance Minister Sri Mulyani Indrawati explained that the world was experiencing uncertainty, especially regarding the recovery after the Covid-19 pandemic and the crisis conditions caused by tensions between Russia and Ukraine which were one of the causes of the spike in global inflation.

In his explanation, inflationary pressure in Indonesia is not as high as some other countries because the increase in global energy prices can be muffled by the state budget as a shock absorber which consequently causes an increase in the need for energy subsidy spending and compensation.

"As the Minister of Finance also said earlier, although from 425 (trillion windfall profits) we have to issue (subsidies) to maintain people's purchasing power so that they do not increase fuel, LPG and basic electricity tariffs, we jump to 2023 which must be properly maintained. "Expenditure is consumption, which is 5 percent, investment is around 6 percent and we have to boost our exports to 7 to 8 percent. So in my opinion, 5.3 percent growth will come, it is an effort that can be achieved by the government," concluded Said.

As quoted from the official website of the Indonesian Ministry of Finance, the KEM-PPKF document is an official state document that contains an in-depth review of the picture and scenario of the direction of economic and fiscal policy. As material for the Preliminary Discussions in the context of preparing the Financial Note and the RAPBN, the Government is obliged to submit the KEM-PPKF to the DPR no later than May 20 of the previous year.

Therefore, the KEM-PPKF as the basis for the preparation of the Financial Note and the 2023 RAPBN has been submitted directly through the Plenary Meeting on May 20, 2022.