Bamsoet: The State Budget Deficit Is Below 3 Percent In 2023, So The Main Challenge

MPR Chairman Bambang Soesatyo or Bamsoet at the opening of the 2022 MPR Annual Session, Tuesday, August 16. (screenshot)

JAKARTA - Chairman of the People's Consultative Assembly (MPR) Bambang Soesatyo (Bamsoet) said that reducing the state budget deficit (APBN) below 3 percent in 2023, is not something easy. Given the uncertain recovery conditions.

"The budget deficit, which must return to less than 3 percent in 2023, is a major challenge, due to uncertain recovery conditions," he said at the 2022 MPR Annual Session in Jakarta, Tuesday, August 16.

In addition, said Bamsoet, a significant increase in debt also causes additional interest payments.

Therefore, as a short-term strategy, proper prioritization and budget reallocation are needed.

"The policy of burden sharing, not only with monetary, but also with the business world, can be an option in efforts to finance uncertainty in the future," he said.

Meanwhile, continued Bamsoet, a long-term strategy requires planning for debt repayments for at least the next 30 years, and at the same time ensuring that fiscal and monetary conditions are maintained.

"On the other hand, coupon payments and the maturity of government debt will have an impact on reducing foreign exchange reserves," he said.

Based on data for July 2022, Indonesia's import needs and foreign debt payments are US$21.6 billion per month.

The position of Indonesia's foreign exchange reserves in July is still worth more than double the international adequacy standard.

Previously, President Joko Widodo (Jokowi) ordered that the 2023 state budget deficit be reduced to below 3 percent of gross domestic product (GDP).

Minister of Finance Sri Mulyani said the government had prepared a Draft State Budget (RAPBN) for 2023 which was able to survive in the midst of global economic shocks and very high uncertainty.

"The 2023 state budget must be designed to be able to maintain flexibility in managing the turmoil that occurs, we often call it a shock absorber," said Minister of Finance Sri Mulyani as quoted from the website of the Presidential Secretariat.