BPS: Limited Fiscal Space Influences The Achievement Of Development Targets

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - The Central Statistics Agency (BPS) reports that during the last 10 years, Indonesia's fiscal gap (fiscal gap) has widened.

This is indicated by the decline in the ratio of state revenue to gross domestic product (GDP) while the ratio of spending on GDP tends to stagnate. Thus is the latest BPS minutes reported last weekend.

In the 2010 period, the difference in the ratio of spending and income to GDP was 0.7 percent. However, in the 2021 period, the fiscal gap has reached 5.7 percent," said BPS quoted Monday, September 19.

Therefore, the institution led by Margo Yuwono suggested optimizing state revenues to be very important as soon as possible. The reason is, the weakening of the income sector can have an impact on the limited fiscal space.

"This can have an impact on supporting the provision of stimulus to carry out priority programs and achieve development targets," wrote BPS.

Furthermore, fiscal consolidation with a deficit of 3 percent of GDP next year is expected to be a foothold in achieving healthy and sustainable APBN management in the short, medium and long term.

BPS said, state spending is carried out with a spending better approach that focuses on priority programs, based on results, efficiency in spending on basic needs, and encourages synergies between institutional ministries.

Meanwhile, state revenues are optimized by carrying out tax reforms such as expanding tax bases, improving tax systems, and capturing economic activities based on information technology and communication (ICT).

In terms of budget financing, the government seeks to be innovative and flexible towards financing sources and maintain the composition of debt within the limits permitted by law.

According to VOI records, the discussion of the 2023 State Budget Bill targets revenue of Rp2,463 trillion. This figure increased by Rp19.4 trillion from the previous draft proposed by President Jokowi in a state speech last August 16.

Meanwhile, for spending to be Rp3,061.2 trillion from the previous Rp3,041.7 trillion. For this estimate, the 2023 APBN deficit is in the range of Rp598.2 trillion or 2.84 percent of GDP.