Sri Mulyani: The 'Durian Collapse' Effect Supports The Health Of The State Budget Amid Soaring Energy Prices

Minister of Finance Sri Mulyani (right) giving a presentation in a virtual discussion (Photo: Screenshot of the Ministry of Finance's Youtube)

JAKARTA – Minister of Finance, Sri Mulyani, revealed that Indonesia is fortunate enough to face the current difficult and stressful situation. The reason is, that as a country that produces a lot of natural resources, Indonesia has more capacity to be able to overcome problems.

First, the increase in the prices of key commodities such as coal and palm oil has no implications for national needs. In fact, Indonesia can benefit from price volatility because it is one of the main exporting countries for these natural commodities.

Second, the margin obtained can be used to meet public energy subsidy funds such as fuel, electricity, and LPG. This was conveyed by the Minister of Finance when speaking in a discussion entitled G20 Digital Transformation.

"Therefore we are enjoying the windfall of commodity earnings", she said via a virtual channel on Thursday, June 30.

According to the Minister of Finance, the current situation is sufficient to support the government's plan to bring state finances back to normal levels in 2023.

"This does not have a significant impact on the budget (APBN), and our efforts to revitalize the state budget can continue. In fact, we believe it will become stronger with a lower budget deficit", she said.

Furthermore, Sri Mulyani explained that the health of the state budget is very necessary to maintain the credibility of the government as well as to implement national strategic programs.

"At the same time, Indonesia can provide protection to the people and also continue the process of economic recovery", she stressed.

For information, the government has a big mission to return the budget deficit to below 3 percent of GDP next year after previously being widened to around 5 percent of GDP since the beginning of the 2020 pandemic.

VOI noted that the discussion of the macro assumptions of the 2023 Draft State Revenue and Expenditure Budget (RAPBN) between the government and the DPR set state expenditures at IDR 2,266.7 trillion to IDR 2,398.8 trillion.

Meanwhile, on the revenue side, it is projected to earn up to a value of IDR 1,884.6 trillion to IDR 1,967.4 trillion.

This means that the 2023 state budget deficit is targeted to slope up from IDR 380.1 trillion to IDR 427.3 trillion or below 3 percent.

Strong indications of achieving these goals are still being maintained when looking at the realization of the latest edition of the May 2022 State Budget. In last week's presentation, Sri Mulyani even said that the state's finances were in a surplus of IDR 132.2 trillion.

This was achieved because the state budget revenue was larger at IDR 1,070.4 trillion compared to the expenditure sector which amounted to IDR 938.2 trillion.